Mastercard taps Paxos to launch crypto trading for banks
Mastercard will deploy its technology to integrate crypto trading into banksâ interfaces, while Paxos is set to provide its trading and custody services.
Mastercard officially announced on Oct. 17 a new program to enable financial institutions to bring crypto trading capabilities and services to their customers.
Called âCrypto Source,â the program is designed to allow users to buy, hold and sell cryptocurrencies, complemented by Mastercardâs proprietary Crypto Secure solution for additional security and compliance.
The tool is launched in cooperation with Mastercardâs existing partner Paxos Trust Company and is reportedly expected to launch in Q4 2022. Paxos is known for providing similar services to global payment giant PayPal, which launched its first crypto services in late 2020.
Within the new partnership, Paxos will provide crypto asset trading and custody services on behalf of the banks, while Mastercard will deploy its technology to integrate crypto trading into banksâ interfaces.
Ajay Bhalla, president of Mastercardâs cyber and intelligence unit, pointed out the companyâs growing crypto expertise and commitment to the market. He mentioned Mastercardâs recent crypto-related investments, including acquisitions of the crypto intelligence service CipherTrace in September and the digital identity platform Ekata in April last year.
Announcing the news, Mastercard referred to the 2022 Mastercard New Payments Index, reporting that 29% of respondents globally hold cryptocurrency as an investment. Another 65% of respondents reportedly indicated a preference for crypto services to be provided by their current trusted financial institution.
âWhat we are announcing today is a connected approach to services that will help bring users safely and securely into the crypto ecosystem,â Bhalla noted.
Paxosâ head of strategy Walter Hessert also highlighted the scale of Mastercardâs global network of financial institutions. According to the executive, the new tool will provide banks and creditors with the âmost trusted way to offer safe, reliable crypto assets.â
Mastercardâs latest crypto initiative comes amid the total crypto market capitalization falling about 60% since the beginning of 2022. According to Jorn Lambert, Mastercardâs chief digital officer, it would be âshortsighted to think that a little bit of a crypto winter heralds the end of it.â
âAs regulation comes in, there is going to be a higher degree of security available to the crypto platforms, and weâll see a lot of the current issues getting resolved in the quarters in the years to come,â Lambert reportedly stated.
Related: Mastercard launches new crypto fraud protection tool
Mastercard has been actively working on various crypto and blockchain-related initiatives in recent years. In January 2022, Mastercard announced a collaboration with the Coinbase exchange in order to allow Coinbase NFT users to make purchases using Mastercardâs cards.
In October 2021, Mastercard partnered with the digital asset firm Bakkt to allow its United States-based customers to buy, sell and hold digital assets through custodial wallets.
Global payment giant Mastercard continues its efforts to promote the cryptocurrency adoption by developing a new tool allowing banks to trade cryptocurrencies like Bitcoin (BTC).