Mastercard Announces Program To Offer Banks 'Secure' Crypto Trading

Mastercard has announced a new program in partnership with crypto trading platform Paxos Trust Company that aims to enable financial institutions to offer crypto trading capabilities and services to their customers.

“Crypto Source” will consist of Mastercard leveraging its technology to integrate Paxos’ crypto-asset trading and custody services into banks’ interfaces, the payments company said in a statement Monday.

A major reason for banks’ crypto reticence involves unencumbered fraud and security issues in the space.

Mastercard and Paxos, however, have stated that with the Crypto Source offering they will handle regulatory compliance and security.

Mastercard, in particular, said its crypto-related offerings for banks and fintechs include “a comprehensive suite of buy, hold and sell services for select crypto assets, augmented with proven identity, cyber, security and advisory services.”

This includes providing clients with crypto cards, digital receipts, loyalty solutions, marketing consultancy services and more.

According to Mastercard's internal data from 2022, 29% of respondents globally hold crypto as an investment, with another 65% indicating a preference for crypto-related services to be provided by their current trusted bank.

Ajay Bhalla, president of cyber and intelligence at Mastercard, believes trust is key when bringing users “safely and securely” to the crypto ecosystem. This ethos can be seen in the company’s recent acquisitions. In 2021, Mastercard acquired CipherTrace, a firm that scans blockchains for illicit transactions and an identity verification company called Ekata, which it bought for $850 million. 

Other crypto-security services that Mastercard has added to its ecosystem include open-banking and insights software Finicity, cybersecurity company RiskRecon, and Bakkt, which let banks and merchants in its network offer crypto-related services.

While cryptocurrencies were originally developed to bypass traditional banking companies, Mastercard, Visa, and American Express continue to explore the space and partner with industry leaders such as Coinbase and FTX.

Mastercard’s Crypto Source program is currently being prepared for pilot programs. The company said that additional details will become available at a later date.

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