Mastercard to allow transactions in certain cryptocurrencies

Mastercard stated that it is also “actively engaging” with central banks across the world on their plans to launch new digital currencies

Mastercard Inc. will allow transaction in certain crypto currencies on its network for its cardholders, making it the latest company to embrace digital assets – a move which comes a couple of days after Elon Musk’s Tesla said it invested $1.5 billion in bitcoin. This sent the value of the world’s top crypto currency soaring, creating hopes for more corporate investment in the digital currency.

Corporate engagement with crypto currencies is not new but investment by Elon Musk’s company is noteworthy as it is the first Fortune 500 company to invest in digital assets.

According to a blog post by Mastercard on Wednesday, it is also “actively engaging” with central banks across the world on their plans to launch new digital currencies.

The company will prioritize consumer protections and compliance in its own plans, Raj Dhamodharan, executive vice president of digital asset and blockchain products and partnerships, said in the post.

Though Mastercard has already partnered with some of the biggest cryptocurrency firms such as Wirex and BitPay, processing payments for transactions on its network require the conversion of digital currencies into fiat currencies.

Our change to supporting digital assets directly will allow many more merchants to accept crypto — an ability that’s currently limited by proprietary methods unique to each digital asset, Dhamodharan said.

This change will also cut out inefficiencies, letting both consumers and merchants avoid having to convert back and forth between crypto and traditional to make purchases, he said.

For its part, rival Visa Inc. has said if a digital currency becomes a recognized means of exchange, there would be no reason why the firm wouldn’t add it to its network, which already supports 160 currencies.

Our philosophy on cryptocurrencies is straightforward: It’s about choice, Dhamodharan said.

He said that Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value.