Mastercard focuses on facilitating crypto investments and preparing its network for a Central Bank Digital Currency, CEO Michael Miebach said during the company’s earnings call for revenue in the third quarter on Thursday.
“We could not have an earnings call without talking about crypto,” Miebach said when asked about the space. “We see significant volumes in terms of people investing in crypto and selling crypto, so as an asset class, a lot is going on, and I think we have a role to play to facilitate consumers wanting to do that.”
Most recently, Mastercard partnered with the Bakkt digital asset platform to make it easier for US merchants, banks, and fintech to adopt and offer cryptocurrency solutions and services.
Miebach noted that the most likely chance of the crypto being used as a payment instrument would be through a government-issued digital currency. He added that Mastercard would prepare its network to manage a CBDC if and when that happens.
“How will a government test that? How will a country figure out between the private sector banks and the governments how to do this?” the CEO said. “That’s where our sandbox comes in; we can provide a safe space for governments and private sector banks to figure out how that would work.”
“Should there be a private sector stablecoin, we might also do that,” Mastercard CEO Michael Miebach added, “but we have stringent principles on when to do this and when not.”
Crucial growth for Mastercard when it comes to crypto
Mastercard has recently announced plans to acquire crypto intelligence company CipherTrace in September. The company previously said that the acquisition would improve its crypto capabilities to obtain information on more than 900 cryptocurrencies currently monitored by CipherTrace, which the US Department of Homeland Security funds.
CipherTrace was established in 2015 and has provided “blockchain forensics” to more than 150 of the largest banks, stock exchanges, financial institutions, and regulators. It offers both security and fraud services for its client’s crypto-related activities. It is practically a company that helps both banks and crypto exchanges, together with regulators and law enforcement, maintain a safe environment for everybody.
Eric Risley, a managing partner at Architect Partners, previously pointed out Mastercard’s acquisition of CipherTrace, as the deals involving financial services will most likely strengthen their presence in crypto.
“What does CipherTrace do? They drive compliance and [anti-money laundering] checks into crypto transactions,” Miebach said during the earnings call. “We can’t run fast enough right now to get into this space because a lot of other people are deep into crypto, and these questions are not resolved.”
It’s truly astonishing to see banks getting involved more and more in the crypto world. This will undoubtedly lead to even more adoption by crypto newcomers and inject a lot of new cash flow into the markets. Probably, following Mastercard’s steps, we’ll begin to see even more giant payment providers joining this trend.