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WHY THIS MATTERS IN BRIEF

Money and money networks are all changing, and that means companies need to stay current, move with the times, and in Mastercards case explore new opportunities.

 

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Mastercard is preparing to announce that any of the thousands of banks and millions of merchants on its payments network can soon integrate crypto into their products. That includes bitcoin wallets, credit and debit cards that earn rewards in crypto and enable digital assets to be spent, and loyalty programs where airline or hotel points can be converted into bitcoin.

 

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To do so, the payments network is partnering with Bakkt, the crypto firm recently spun off by Intercontinental Exchange, which will be the behind-the-scenes provider of custodial services for those who sign up, executives at the two firms told Reuters.

“We want to offer all of our partners the ability to more easily add crypto services to whatever it is they’re doing,” Sherri Haymond, Mastercard’s executive vice president of digital partnerships, said in an interview. “Our partners, be they banks, fintechs or merchants, can offer their customers the ability to buy, sell and hold cryptocurrency through an integration with the Baktt platform.”

The announcement could lead to a significant expansion in the ways regular Americans earn and spend bitcoin and other cryptocurrencies. Mastercard runs one of the dominant global payments networks along with Visa and has relationships with more than 20,000 financial institutions around the world. There are 2.8 billion Mastercards in use, according to the company.

 

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Interest in bitcoin has remained high as the original cryptocurrency surged this year, hitting a record price above $60,000 this month. U.S. regulators have allowed the fund industry to offer bitcoin-linked ETFs for the first time this month, while big institutional investors like bond giant Pimco have said they were considering trading crypto.

That interest has led Mastercard clients to ask the network for help in providing crypto services, according to Haymond. That way, banks can keep customers on their own platforms rather than seeing dollars migrate to crypto exchanges, she said.

Shares of Bakkt, which began trading as a public company last week, surged an incredible 234% on the news. Mastercard and Bakkt were set announce their partnership later Monday at the annual Money20/20 conference in Las Vegas.

 

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Besides providing crypto wallets and credit cards for banks, the partnership means that even merchants and restaurants can begin to offer rewards in bitcoin instead of traditional points, according to Bakkt CEO Gavin Michael. Existing points can be converted into crypto at rates set by the participating companies, giving customers the ability to earn a yield, he said.

“We’re lowering the barriers to entry, allowing people to take something like your rewards points and trade them into crypto,” Michael said in an interview. “It’s an easy way to get going because you’re not using cash, you’re putting something that’s an idle asset sitting on your balance sheet, and we’re allowing you to put in to work.”

About author

Matthew Griffin

Matthew Griffin, described as “The Adviser behind the Advisers” and a “Young Kurzweil,” is the founder and CEO of the World Futures Forum and the 311 Institute, a global Futures and Deep Futures consultancy working between the dates of 2020 to 2070, and is an award winning futurist, and author of “Codex of the Future” series. Regularly featured in the global media, including AP, BBC, Bloomberg, CNBC, Discovery, RT, Viacom, and WIRED, Matthew’s ability to identify, track, and explain the impacts of hundreds of revolutionary emerging technologies on global culture, industry and society, is unparalleled. Recognised for the past six years as one of the world’s foremost futurists, innovation and strategy experts Matthew is an international speaker who helps governments, investors, multi-nationals and regulators around the world envision, build and lead an inclusive, sustainable future. A rare talent Matthew’s recent work includes mentoring Lunar XPrize teams, re-envisioning global education and training with the G20, and helping the world’s largest organisations envision and ideate the future of their products and services, industries, and countries. Matthew's clients include three Prime Ministers and several governments, including the G7, Accenture, Aon, Bain & Co, BCG, Credit Suisse, Dell EMC, Dentons, Deloitte, E&Y, GEMS, Huawei, JPMorgan Chase, KPMG, Lego, McKinsey, PWC, Qualcomm, SAP, Samsung, Sopra Steria, T-Mobile, and many more.

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