Mastercard has partnered with Circle to use USD Coin (USDC) stablecoin to facilitate crypto-to-fiat conversions in a pilot program that will test using USDC as a means for card issuers to more easily settle payments to Mastercard.
According to an announcement by Mastercard on Tuesday, July 20, this pilot program will use USDC stablecoin making it simpler for partners to convert cryptocurrency to traditional fiat currency. For this program, Mastercard is working with Circle, the principle operator of USDC stablecoin, Evolve Bank & Trust, Paxos Trust Company, the leading blockchain infrastructure and regulated stablecoin issuance platform. Other partners include Metropolitan Commercial Bank, Uphold, BitPay, Apto Payments, i2c Inc., and Galileo Financial Technologies.
According to Mastercard, this program aims to address the challenges while performing the currency conversion. Currently, when people spend their crypto assets, it must enter and settle on Mastercard’s network as traditional fiat currency. Card issuers that enable payments using digital assets need to first convert those assets to fiat before settling a transaction. This is a costly and complex process as all digital assets do not have the price stability with US Dollar.
Mastercard first announced in February 2021 that it was working to bring stablecoin for payments on its network. Now Mastercard has selected USD Coin (USDC), a US Dollar-pegged stablecoin issued by Centre Consortium with a market cap of over $26 billion, to enhance its card program for cryptocurrency wallets and exchanges, making it simpler for partners to convert cryptocurrency to traditional fiat currency.
To make this project possible, Mastercard is in discussion with “Evolve Bank & Trust and Metropolitan Commercial Bank to issue cards, Uphold and BitPay to provide real-time crypto wallet technology, and i2c Inc., Apto Payments and Galileo Financial Technologies® to support processing and program management.” Paxos and Circle will facilitate the conversion of crypto to fiat through fiat-backed stablecoins.
According to Mastercard, making the crypto-to-fiat conversion simpler will allow more banks and crypto partners the opportunity to offer their consumers the choice of paying with cryptocurrency. Raj Dhamodharan, executive VP of digital asset and blockchain products & partnerships at Mastercard, commented:
“Today not all crypto companies have the foundational infrastructure to convert cryptocurrency to traditional fiat currency, and we’re making it easier. Through our engagement with Evolve, Paxos, Circle and the larger digital assets community, Mastercard expects to deliver on our promise of consumer choice to provide options to people around the world on how and when to pay.”
Dante Disparte, Chief Strategy Officer and Head of Global Policy at Circle, said:
“The collaboration between Circle and Mastercard demonstrates that dollar digital currencies like USDC play a foundational role in making payments more efficient and can facilitate new economic activity for businesses worldwide.”
As reported, Mastercard competitor is also using USD Coin (USDC) to settle transaction.
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