Visa and Mastercard’s rivalry in the financial sector is legendary, so it’s only fitting that the two companies are looking to out-do each other in the crypto sphere as rapidly as possible. Weeks after Visa announced its own push towards crypto expansion, Mastercard made a similar reveal.
Now Mastercard is the latest payments behemoth to make crypto access as easy as possible through partnerships with numerous companies.
Building on-ramps over barriers to adoption
For both payments-processing giants, on-ramping seems to be the name of the game. It has, and continues to be, one of the key steps towards widespread crypto adoption.
Visa and Mastercard’s strategies are roughly the same: issuing crypto debit cards that can be used as easily as regular ones with any merchant regardless of their familiarity with crypto.
Their approach seems to differ slightly, however.
Initially, it looked as if Mastercard was going to head more into the explorative side through its Mastercard Accelerate program than Visa, which was quick to announce its partnership with Coinbase. Now, as Visa is looking to bring forth a unique debit card that would involve many different altcoins with the help of around 50 crypto exchanges and platforms, Mastercard has focused on using stablecoins to deal with crypto volatility.
Out of nearly a dozen newly-announced crypto partnerships, the one with Circle stands out the most. Just like in Visa’s case, Circle’s USD Coin (USDC) will be used to make instant conversions between crypto and USDC as a fiat surrogate without losses on the customer’s part. Mastercard’s network would power the exchange.
Stablecoins as the bridge between currency and crypto
There have been a few detractors from private stablecoins, with Fed Chair Jerome Powell being among the more prominent. Then there’s the widely-publicized Tether settlement. Because of the lack of regulation surrounding existing stablecoins, there’s always been some amount of concern about their reserves. Do they really have $1 of liquid assets to back every $1 in coin liabilities? It’s hard to know for sure!
If they don’t, they’re guilty of engaging in fractional reserve banking without proper oversight or licensing.
Strangely, most stablecoin haters who criticize the lack of reserve transparency would never consider pointing out the U.S. dollar itself is in a similar position with its $6 trillion in assets against $32.7 trillion in liabilities.
Regardless, the decision by both Visa and Mastercard to use one of the two primary, privately-issued stablecoins should help bolster confidence in both stablecoins and the crypto market as a whole.
The Gemini card
Mastercard’s most anticipated among its offering has definitely been the Gemini card. Its 3%, realtime-crypto-cashback rewards program is worth salivating over. (Maybe we’ll all benefit from some kind of escalating rewards battle between the credit card heavyweights?)
Already with a likely-full waiting list and scheduled for launch this summer, the Gemini card looks like Mastercard’s wide push into the crypto space. The card will be available in all U.S. states, function similar to any credit card and facilitate purchases in over 30 cryptocurrencies.
While Visa’s already done its share of crypto on-ramping, it doesn’t yet seem to have the one-stop-shop solution that Mastercard does. Nonetheless, Visa’s approach of including known exchanges and allowing users to access their existing wallets is an interesting one, and developments by both companies are undoubtedly going to be closely watched in the coming months.