Mastercard integrates stablecoins into global payments network to bridge crypto and commerce

US payment card services giant Mastercard has made a crucial strategic move by announcing end-to-end capabilities to allow customers to spend and merchants to receive stablecoin transactions. Positioning itself as the bridge between crypto and everyday commerce, Mastercard has said it is advancing the future of payments, finance and technology with stablecoin acceptance and payments capabilities.

"To allow consumers and businesses to use stablecoins as easily as the money in their bank accounts, Mastercard is providing an integrated, 360-degree approach," says Mastercard.

To enable the stablecoin transactions, Mastercard partnered with crypto natives like MetaMask, Kraken, Gemini, Bybit, Crypto.com, Binance, Monavate and Bleap. The company says enabling the stablecoin transactions will allow consumers to enter the crypto ecosystem to earn rewards, pay, and spend the stablecoins in their crypto wallets via traditional cards. They can also withdraw stablecoins into their bank accounts with Mastercard Move.

Mastercard has also partnered with OKX to launch the OKX Card, providing millions with easy access to their funds. "Mastercard and OKX will explore new opportunities to help people meaningfully engage with digital assets and connect with their passions – leveraging OKX’s leadership in crypto trading and its growing Web3 ecosystem to bring more people on-chain," Mastercard said.

For merchant settlement, Mastercard has teamed up with Nuvei and Circle to give them the option to receive their payments in stablecoins such as Circle’s USDC, regardless of how a consumer chooses to pay. Mastercard is also working closely with Paxos to enable this functionality across Paxos-issued stablecoins. 

Other crucial use cases for stablecoins are remittance and cross-border disbursements. However, current user experiences are cumbersome and lack essential verification and transparency to protect their transactions. Mastercard aims to change this via Crypto Credential that allows crypto exchange users to send and receive digital assets with simple and trusted usernames. "Wirex, Bit2Me, Lirium, Notabene, Coins.ph and Mercado Bitcoin have already joined the Mastercard Crypto Credential ecosystem."

The move is expected to make remittance and cross-border disbursement "fast and cost-effective".

Stablecoins can also streamline settlement across markets and currencies around the world. The company says its Mastercard Multi-Token Network (MTN) helps enable real-time payments and redemptions, allowing partners like Ondo Finance to leverage on-chain tokenised assets. "JPMorgan Chase and Standard Chartered are connected to MTN today, connecting deposit accounts to new and emerging digital asset use cases."

“When it comes to blockchain and digital assets, the benefits for mainstream use cases are clear,” said Jorn Lambert, chief product officer at Mastercard. “To realise its potential, we need to make it as easy for merchants to receive stablecoin payments and for consumers to use them. We believe in the potential of stablecoins to streamline payments and commerce across the value chain. Unlocking this is core to how we navigate the rapidly changing world, giving people and businesses the freedom they want by providing the choices they deserve.”

What are stablecoins?

Stablecoins are a type of cryptocurrency which maintains a stable value by being pegged to a reserve asset, like fiat currencies like USD, commodities and other cryptos.

Unlike volatile cryptos, stablecoins aim to minimise price fluctuations. This usability makes them suitable for fast and cheap cross-border payments, DeFi integration, hedge against inflation, easier crypto trading, payments, and remittances. Key examples of stablecoins are Tether (USDT), USD Coin (USDC), Binance USD (BUSD), DAI, PAX Gold (PAXG), FRAX, among others.

With increasing global regulatory clarity, stablecoins are evolving from crypto trading tools to essential solutions that bring efficiency and programmability to payments, disbursements, and remittances.