Today, Mastercard announced their goal of supporting more financial institutions in offering cryptocurrency trading.
People are still optimistic about the future of cryptocurrencies despite the present bear market. According to Jorn Lambert, chief digital officer at Mastercard, “there is still a high desire for cryptocurrencies among clients”.
“There’s a lot of consumers out there that are really interested in this, and intrigued by crypto, but would feel a lot more confident if those services were offered by their financial institutions… It’s a little scary to some people still.” Mastercard’s chief digital officer, Jorn Lambert, told CNBC.
Is the dream of escaping banks dead?
Many in the cryptocurrency community view blockchain technology as a way to liberate people from banks, now every major banking institution seems to be aggressively moving to take positions within the crypto market.
According to Mastercard, many people prefer having their bank involved. They claim that when they surveyed customers, almost 60% of those surveyed stated they were willing to own cryptocurrency in the future but preferred to do so through their current bank.
Mastercard’s bold offer to banks: We’re ready to handle every major concern…
Large investment banks like Goldman Sachs, Morgan Stanley, and JPMorgan already have specialized crypto teams, but still haven’t offered a way for their clients to buy cryptocurrency – but they may be more likely to begin if all they need to do is trust Mastercard, rather than directly partner with an exchange.
Mastercard says that if a bank chooses them to handle crypto offerings to customers, they will handle both security and regulatory compliance – the two main concerns that have held many intuitions back.
Opening to a new market usually comes with a new load of liabilities – but with Mastercard taking responsibility for them adhering to crypto compliance guidelines, confirming transactions, and offering anti-money-laundering and identity monitoring services, there’s not many reasons left to say no.
Bad News for existing exchanges… maybe…
The program will involve Mastercard routing orders to Paxos, an exchange they’ve already been working closely with – so if banks do embrace this Mastercard model, it may take a bite out of the pool of potential future users of Coinbase, Kraken, Gemini, and other exchanges operating in the U.S.
However, if successful, Mastercard’s program will likely inspire banks to create their own, similar partnerships directly with crypto exchanges.
The pilot program will launch in the first quarter of 2023. There is currently no information on which banks will participate.
