Regardless of your opinion on cryptocurrency, digital assets are slowly but surely becoming an essential part of the payment world, offering new opportunities for businesses and people alike. Many are using their credit cards to buy Bitcoin, which is delivered straight to their wallets; the process of setting up the transaction is similar to that of linking and verifying your bank account. It’s undoubtedly the best way to buy Bitcoin. An ever-increasing number of financial institutions, payment networks, and banks are building cryptocurrency teams for the future. Meanwhile, many governments are trying to capitalize on blockchain technology by investing in their own digital currencies.
Mastercard, the second-largest payment processing corporation, recently announced that it would broaden its crypto payment card program, even if authorities have increased scrutiny of the industry. To do so, the company wants to collaborate with crypto firms, giving customers an easy way to pay with, take advantage of, or receive crypto holdings as recognition. Account openings of crypto-based debit and credit cards have outperformed traditional cards. This doesn’t come as a surprise – the formidable growth in cryptocurrency wallets and digital assets has led to many businesses opening their doors and supporting transactions, so people can spend Bitcoin much like cash.
Mastercard Has Already Partnered with Crypto Exchanges, Including Binance
Mastercard has already partnered with Binance, one of the world’s leading blockchain and cryptocurrency infrastructure providers, to launch a crypto card in Brazil earlier this year, which operates using the consumer’s account, to promote cryptocurrency adoption in Latin America. People can make payments in the traditional currency, funded by their crypto holdings. The Binance Card, which Dock issues, allows users to convert and spend cryptocurrencies at online and offline merchants globally. Anyone with a valid national ID can pay bills in cryptocurrencies, including Bitcoin. Binance seeks to continue to expand the card into new markets.
Rather than exchanging Bitcoin into the local currency, individuals preload their debit cards with a set amount of cryptocurrency that is automatically converted at the time of purchase. The Binance Card can be used anywhere Mastercard is accepted, so it’s one of the most versatile and flexible cards available. Needless to say, the card comes with robust security features to protect your funds because providing access to digital assets safely is part of the value proposition. The cashback percentage depends on the card level, based on the number of crypto holdings in the wallet, so it’s calculated daily for each purchase from the previous date.
The Crypto Credential Service Brings Additional Trust to The Cryptocurrency Space
There’s an apparent lack of common standards and trust in the financial industry, which could create vulnerabilities in security and compliance. The results would be undesirable for the cryptocurrency industry. The good news is that Mastercard has launched the Crypto Credential service, which helps establish trusted interactions between businesses and users leveraging blockchain technology. Those interested in interacting across Web 3.0 environments must comply with the defined standards for the types of activities they’d like to pursue. Mastercard defines the verification standards and levels, not to mention that it makes available the enabling technology to enable more use cases.
Transactions between users’ wallets are verifiable, starting with the transfer of digital assets. To be more precise, wallets can be identified in transactions along the lines of requirements such as the FATF Travel Rule, which requires identity information must be collected from senders and recipients of domestic and cross-border wire transfers. As far as cross-border transfers are concerned, traditional payment systems are restrictive and expensive, so cryptocurrency has emerged as a viable alternative. Bitcoin, for instance, allows money to be transferred to anyone and is convenient for peer-to-peer transfers, so tokens can be transferred to anyone, whether a family member, friend, co-worker, etc.
Crypto Cards Are a Convenient Way for Crypto Holders to Spend Their Funds
The first crypto card was launched in 2015, yet adoption didn’t pick up until recently. According to Statista, the most popular product to buy with cryptocurrency in 2022 was mobile data, which correlates with the preferences of low-income consumers. Since it’s difficult to build a global acceptance network where people can exchange Bitcoin for goods and services, crypto wallet companies have moved to Mastercard (and Visa). Mastercard, in particular, wants to continue crypto card expansion, even if it has countless partners around the world offering crypto card programs. Crypto-backed debit and credit cards are becoming more prominent as they grant users more privacy than they would normally receive from a financial institution or a bank.
The widespread acceptance of crypto cards is a significant contributing factor to their success. They can be used to pay at numerous points of sale worldwide and online retail shops; instead of using funds from a bank account, users can add funds from their crypto wallets or exchange accounts. Transactions can be completed anywhere using digital assets, including POS machines in stores. Crypto-backed debit and credit cards enhance the interoperability of networks since they can be deployed across different blockchains to facilitate on-chain transactions between decentralized apps and protocols. The private keys are stored offline, meaning they’re not susceptible to hacks.
Wrapping It Up
Mastercard has curated partnerships with digitally innovative firms like Binance to enable consumers to use their cryptocurrency for purchases while benefiting from protection and wide acceptance. And it will continue to do so. This is a welcomed move for the crypto industry because it comes at a time when regulators are enforcing actions against blockchain-using companies, particularly in the United States. Strategic partnerships are an essential element of business growth strategy (it’s no different for cryptocurrencies); these efforts, if they succeed, would mark a major turning point.
The development of crypto cards has legitimized digital currency, increasing its adoption and ubiquity. A crypto-backed card works just like any card issued by a financial institution, meaning it can be used for regular purchases. Cryptocurrencies like Bitcoin are poised to play a crucial role in the future of payments because transactions can be processed faster and with fewer fees.