Since its early days, the cryptocurrency market has been looking towards national governments to facilitate global adoption. However, they may have been barking at the wrong tree all along.
New state regulations for crypto use and blockchain implementation are necessary. But, their application is tediously slow. Global payment processors like Mastercard and Visa can accelerate the process. Their latest projects show that they are finally ready to embrace cryptocurrency.
Why now? Well, that’s what we’re trying to find out today!
From Foe to Friend
In January 2018, immediately after the Bitcoin Bubble Crash, almost everyone in the traditional finance markets gave cryptocurrency the evil eye. Digital assets, although built on peer-to-peer, trustless, decentralized protocols, were seen as conspiracy scams meant to deprive honest investors of their hard-earned money.
Next, world-renowned payment companies like Visa, Mastercard, and PayPal chose to ban cryptocurrency and deemed crypto transactions as high-risk. It seemed like the end was near for Bitcoin and all its virtual money friends, a.k.a. altcoins.
Nevertheless, the cryptocurrency industry decided to take it on the chin and carried on. Developers kept on developing, traders kept on trading, and the blockchains’ decentralized universe kept expanding.
Fast forward 2-and-a-half years to the present day, and the crypto market stands out as one of the most promising financial sectors:
- It came out alive out of a global pandemic.
- It has a market cap of more than $350 billion.
- It has attracted the interest of Wall Street executives and social media giants like Facebook.
- It leads to a decentralized banking revolution.
These are just a few of why payment processors are doing a 180 in their approach to cryptocurrencies. Everyone wants to be there when the next crypto sensation appears or when owning a digital wallet will be just as normal as having a physical one.
How Visa prepares to embrace cryptocurrency
One of the payment industry giants, Visa, could not stand aside and watch cryptocurrency development without getting a slice of such a rewarding pie.
In recent months, Visa initiated or took part in several projects that involve cryptocurrency in one form or another. It finally confessed its embracing of digital money in a recent blog, entitled Advancing our approach to the digital currency, by stating:
“We believe that digital currencies have the potential to extend the value of digital payments to a greater number of people and places. As such, we want to help shape and support the role they play in the future of money.”
In translation, we didn’t realize that there are tens of millions of crypto users out there. We simply cannot miss the opportunity to deep dive into this huge pool of customers.
In January 2020, Visa also dealt with the crypto exchange Coinbase when the company acquired Plaid.
Finally, Visa supports blockchain-based companies’ development through its FastTrack program that gives access to its resources and systems for fintech startups.
How Mastercard approaches the rise of digital currencies
Mastercard gradually changed its approach towards cryptocurrency, as well. This year, the giant payment processor struck a deal with Wirex, a London-based startup, to make it easier for companies in the cryptocurrency industry to issue their own payment cards.
In a statement for the occasion, Raj Dhamodharan, Mastercard’s executive vice president for digital asset and blockchain products and partnerships, said”
“The cryptocurrency market continues to mature, and Mastercard is driving it forward, creating safe and secure experiences for consumers and businesses in today’s digital economy.”
No need for translation here. Mastercard is keen to stick its name to any kind of fruitful payment service that may spur in the cryptocurrency ecosystem. The Mastercard Accelerate Program has been developed specifically to support startups in the industry and be the first to partner up with fast-pacing projects or crypto debit and credit card providers.
As part of its partnership with Wirex, Mastercard users can instantly convert cryptocurrencies into conventional fiat currency. Additionally, they get access to a program that rewards them with 1.5% of the value of purchases made with these cards in Bitcoin (BTC).
Visa and Mastercard are not the only payment processors that have reviewed their relationship with cryptocurrency. PayPal has recently confirmed its intention to allow its users to make cryptocurrency purchases in a letter to the European Commission.
The crypto community is ecstatic to see that some of the world’s easiest recognizable financial brands embrace Bitcoin and cryptocurrencies. It could very well be the decisive step in crypto adoption on a global scale.
With big names like Visa, Mastercard, and PayPal offering crypto-based services, the industry gains credibility. People who have not yet been exposed to digital assets can have the opportunity to discover more about what they are, how they work, and how they can invest in one of the fastest emerging markets in the world.
From there on, governments everywhere should find easier ways to regulate and legalize digital money and cryptocurrency use. Central banks should also accelerate the issuance of CBDCs, and in a few years, we could witness the demotion of fiat currency.