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The big card networks have worked for several years to exploit the growing business of transactions based on cryptocurrency, and the latest development emerged early Thursday with an announcement that Mastercard Inc. is looking to enable acceptance of stablecoin-backed cards at the more than 150 million merchants worldwide that accept its brand.
In the venture, Mastercard is working with MoonPay, a New York City-based digital-wallet provider with links to more than 500 digital-currency exchanges and wallets, according to the companies’ joint announcement. Through these integrations, MoonPay reaches more than 100 million active users of cryptocurrency, according to Mastercard’s announcement.
Stablecoins are digital currencies whose value is pegged to a constant value reflected by a fiat currency, such as the dollar. Some 20 million digital wallets around the world are generating stablecoin transactions each month, while 120 million hold stablecoin balances, according to data from Mastercard and MoonPay.
In the venture with Mastercard, MoonPay will rely on Iron, a developer of application programming interfaces for stablecoin transactions. MoonPay reportedly paid $100 million to acquire the company in March. Iron’s technology will reportedly ease cross-border payments as well as payouts to contractors and gig workers.
Mastercard is counting on the partnership with MoonPay to exploit the steady value of stablecoins and accelerate a movement into digital currency that began years ago. “We are redefining how money moves globally and driving a shift in payments as we know it,” said Scott Abrahams, executive vice president, global partnerships, at Mastercard, in a statement. “Together with MoonPay, we’re building innovative and secure connectivity between crypto and mainstream finance ecosystems.”
Certainly, stablecoins have attracted more interest in the broader payments industry than have cryptocurrencies not linked to the steady value of fiat money. “I’ve been seeing a growing excitement around stablecoins in the U.S.,” notes Aaron McPherson, principal at the advisory firm AFM Consulting. “Mastercard is trying to keep up with it and not be left behind.”
“Anything Mastercard does is significant,” he adds.
But crypto experts like McPherson argue stablecoins may not have broad utility in markets like the U.S., where alternatives are readily available. “It’s questionable what problem [Mastercard and MoonPay] are solving,” he says. “I don’t think there’s going to be a lot of demand for it.”
Still, work toward getting crypto transactions running on major card-network rails isn’t slowing down. On Wednesday, two companies announced they will work together to enable cryptocurrency on existing banking networks as well as on Visa and Mastercard.
The effort stems from a partnership between BlocPal, a banking-technology platform, and Mobilium, a provider of compliance software and other payments technology. Working together, the companies say they hope to allow BlocPal to support transactions on what they call “global banking rails,” as well as the Visa and Mastercard networks.
