Can the cryptocurrency industry grow without financial institutions? For Mastercard, these are essential to attract the curiosity of the general public. As a result, the American firm has teamed up with Paxos to help banks democratize cryptocurrencies to their customers.
A new Mastercard initiative to democratize cryptocurrencies
Mastercard, the 2nd bank card network in the world, continues to launch initiatives to popularize cryptocurrencies among the general public. The American company has just announced its Paxos collaboration, a brokerage platform focused on cryptocurrencies.
Together, the two firms will help and support companies to provide them with all the necessary tools in the areas of regulation and safety.
According to Mastercard, many people interested in cryptocurrencies have not yet reached the investment milestone. In question, the sector always seems correlated, in the collective imagination, with illicit and risky activities. According to Jorn Lambert, Chief Digital Officer of Mastercard:
The cryptocurrency industry is still scary for some people. […] There are many people interested and intrigued by cryptos, but they would feel more confident if these services were offered by their financial institutions.
Competition in crypto is heating up
By offering its services to banks, Mastercard is taking an ambivalent position in the Web3 ecosystem.
If banking institutions begin to offer brokerage and management services related to cryptocurrencies, some exchanges risk losing market share. The platforms most accessible to beginners will be the first to suffer the consequences.
Furthermore, the storage of cryptocurrencies by centralized companies goes against the ethics of Bitcoin favoring disintermediation. But according to Jorn Lambert, opening up banks to these new assets is the only way to popularize cryptocurrencies:
It’s hard to believe that the crypto-asset industry will truly go mainstream without considering the financial industry as we know it.
The competition is also intensifying for Mastercard: recently, the Visa company joined forces with the banking giant JP Morgan to develop cross-border payments on the blockchain.
Despite everything, Bitcoin is still not unanimous among institutional investors. Recall that James Dimon, CEO of JP Morgan, said a few days ago that cryptocurrencies were “decentralized Ponzi pyramids”.
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