Mastercard joined efforts with Circle to test USDC as a bridge to bring more simplicity to conversions between fiat and cryptocurrency. The ultimate goal is to make it easier for companies to manage Mastercard cryptocurrency cards.
The renowned global payments company, Mastercard, has chosen its first stable coin and has joined efforts with a group of companies to carry out plans to incorporate cryptocurrencies into its payments services.
Circle, the blockchain company that operates the stable coin USDC, announced Tuesday a partnership with Mastercard for consumers and businesses worldwide to take advantage of USDC in payments and transactions. Specifically, the alliance intends to facilitate conversions between crypto and fiat currency by applying Circle’s stable coin as a bridge asset.
USDC is Bridge for Crypto-Fiat Conversions
While including a stablecoin in the crypto-fiat conversion process may look like an extra step, adding USDC can make the process faster. Currently, card issuers must deal with the high costs of switching between crypto and fiat when settling a transaction.
Dhamodharan, Executive Vice President of Digital Assets, and Blockchain Products at Mastercard explained that not all companies count on the fundamental infrastructure to transform cryptocurrency into traditional fiat currency.
On many exchange platforms, some cryptocurrencies can be traded more easily by stablecoin than by fiat currency. The ultimate goal is for the USDC trial to help expand the crypto card service, allowing more companies to have the ability to offer their customers the option of spending digital currencies between merchants that accept Mastercard around the world.
Mastercard had already carried out plans in February to allow merchants the possibility of receiving payments with cryptocurrencies by the end of this year. Dhamodharan had already hinted that stablecoins would be a step towards that ultimate goal.
Mastercard is already conducting plans regarding cryptocurrencies
According to a CoinDesk report, the stable coin testing program led by the payments giant also includes partnering with a handful of companies. Apart from Circle, Evolve Bank & Trust and Paxos Trust Co. are also involved in the pilot, although their roles are unclear.
Mastercard announced that it is currently in conversations with Evolve and Metropolitan Commercial Bank to start issuing cryptocurrency cards. Likewise, the company’s spokesperson, Katie Priebe, clarified that USDC would be the only stable coin involved in the program. She added that the pilot should be ready soon, although a specific date is yet unclear.
The company is also talking with cryptocurrency startups Uphold and BitPay to bring digital wallet technology. There are conversations with three firms from the traditional card business to manage more back-end functions.
Mastercard is not the only company in the payments sector measuring the potential of stablecoins for transactions. Its main rival, Visa, also signed an alliance with Circle last year to help the company unlock “fast and cheap payments.”
By: Jenson Nuñez
