Mastercard has partnered with Paxos to launch Crypto SourceTM, a program that allows financial institutions to provide secure crypto trading services to customers.
“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,” Mastercard chief digital officer Jorn Lambert said. “It’s a little scary to some people still.”
Through Crypto SourceTM, financial institutions can purchase, hold and offer services for crypto tokens. Crypto SourceTM also offers crypto program management services, which include product development, application design and tech implementation.
The payment service’s new partner, Paxos, is a renowned blockchain infrastructure platform. In the partnership, Mastercard offers tech support, and Paxos provides services concerning crypto-asset trading and custody.
Lambert said Mastercard wanted to cultivate a long-term partnership with Paxos. Meanwhile, Paxos head of strategy Walter Hessert described the collaboration as “exciting.”
“This exciting offering developed by Paxos and Mastercard will give FIs the fastest and most trusted way to offer safe, reliable crypto access for their consumers globally,” Hessert said.
“We’re thrilled to partner with Mastercard to further accelerate the mainstream adoption of digital assets.”
Mastercard equips the program with its Crypto SecureTM to provide improved security, which includes anti-money laundering measures, transaction tracking systems, a Know Your Customer policy and crypto analytics. With Crypto SourceTM, consumers are not only able to buy tokens but can also cash out their investments. The payment technology company also guides bank and fintech partners through complex financial regulations.
Mastercard Cyber & Intelligence head Ajay Bhalla explained that the company was committed to offering “technically advanced solutions available in the market” to users. Last year the company acquired CipherTrace, a crypto forensics outfit, and Ekata, a digital identity platform, to achieve its development objective.
According to the company’s press release, it is preparing to launch the pilot version of Crypto SourceTM. The broader scale of the program's availability has yet to be announced.
Market study on crypto adoption
Mastercard Global Foresights worked with The Harris Poll and Insights and Analytics earlier this year to study global crypto adoption. The survey, involving 35,040 adults, found that 29 percent of participants had invested in crypto.
Sixty-five percent of the participants said they preferred to receive crypto-related services from reputable financial institutions with which they had already registered. This finding became one of the foundations for the Crypto SourceTM program.
Lambert said the company wanted to explore the crypto market and its underlying technology to enable ease of payments for its customers. He acknowledged the current bear market in the crypto ecosystem but insisted that more transactions would happen in the future.
What will the price of Bitcoin be January 1st, 2023?
— K A L E O (@CryptoKaleo) October 17, 2022
“It would be shortsighted to think that a little bit of a crypto winter heralds the end of it -- we don’t see that,” Lambert said. “As regulation comes in, there is going to be a higher degree of security available to the crypto platforms and we’ll see a lot of the current issues getting resolved in the quarters in the years to come.”
Lambert also said that it would be impossible for crypto to become “mainstream” without integration into traditional finance. A number of major financial institutions, including Goldman Sachs and JPMorgan, have formed their own crypto teams but have yet to offer crypto services to clients.