Mastercard is planning to launch a project in 2023 that allows banks and financial institutions to provide crypto trading services to their clients, according to a CNBC report. Mastercard’s new program will serve as a bridge that connects banks and Paxos, a crypto trading platform used by PayPal and others.
Mastercard’s Program to Connect Banks and Crypto Trading Platform Paxos
Payments behemoth Mastercard is set to announce a service that will allow banks and financial institutions to offer cryptocurrency trading services to their customers, the company told CNBC. The aim of the program is to drive crypto adoption by making it easier for banks to foray into the space of digital assets.
Mastercard’s upcoming program will act as a “bridge” between banks and a crypto trading platform Paxos, a service used by PayPal. Furthermore, Mastercard will also be responsible for regulatory compliance and security, two primary factors because of which banks avoid getting into crypto.
But retail investors have been steering clear of crypto investing too in the recent period, due to the massive market sell-off that halved the value of Bitcoin (BTC) and Ether (ETH) in the past 6 months. The so-called ‘crypto winter’ came as a result of a tough macroeconomic environment and geopolitical tensions.
Crypto Struggles to Remove the Need for Middlemen
Jorn Lambert, Chief Digital Officer of Mastercard, said surveys showed that many investors are still interested in crypto but 60% of respondents said they would rather buy crypto through banks.
“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.”
– Jorn Lambert, Chief Digital Officer of Mastercard.
This marks a somewhat ironic twist knowing that crypto aims to remove the need for middlemen and create a decentralized system. This is because blockchain technology, which powers crypto assets, allows users to complete transactions without an intermediary. However, banks and financial services providers such as Mastercard and Visa continue to be heavily involved.
The program is not the first move Mastercard made toward crypto. In 2021, the payments giant announced plans to support some cryptocurrencies directly on its network, marking a significant step in terms of crypto adoption. More recently, the company rolled out a tool that allows banks to evaluate the risk of fraud associated with crypto merchants within its network.
This article originally appeared on The Tokenist
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