Mastercard Sees ‘Massive Services Opportunity’ in Cryptocurrency, But as a Payment Tool Bets on CBDC

“We can't run fast enough right now to get into the space because a lot of other people are deep into crypto,” said CEO Michael Miebach.

Payments giant Mastercard posted stronger-than-expected quarter third financial results with revenue rising 30% to $5 billion and gross dollar volume surging 20% while purchase volume increased 23%.

During the company's earnings call with analysts, Chief Executive Officer Michael Miebach talked about being “excited” about the acquisition of CipherTrace, a crypto security and fraud monitoring company.

The fact that CipherTrace supports 900 cryptos, Mastercard sees it as “a massive services opportunity.”

“In the crypto space, we're making it easier for crypto players to connect to our network,” said Miebach, noting that they have signed up a number of new crypto wallet providers and exchanges this quarter.

Meanwhile, Mastercard’s crypto program allows consumers to easily buy crypto assets, spend their crypto balances wherever it is accepted, cash out their proceeds with Mastercard Send, and earn rewards in the form of crypto or even NFT, said the CEO.

“We're also seeing a growing services opportunity in this space.”

When asked about how he sees the overall crypto ecosystem evolving, starting with “we could not have an earnings call without talking about crypto,” Miebach said they are clear on how they want to play in the space.

“We see significant volumes in terms of people actually investing in crypto and selling crypto. So as an asset class, there's a lot going on,” he said. Here, Mastercard facilitates these transactions through partnerships with crypto firms.

As for crypto as a payment tool, Mastercard has a “differentiated view” in the way that they believe, “the most likely chance of this kind of technology to work for payments is issued through a government in the form of central bank digital currency.”

When a government is ready to launch their CBDC, which Miebach said will “exist alongside the dollar or the euro settlement currency in our network,” they will make their network ready to do that.

Mastercard’s sandbox provides a safe space for government and private sector banks to understand how CBDC works. And if there’s a private stablecoin, “we might also do that,” he added.

“We can't run fast enough right now to get into the space because a lot of other people are deep into crypto and these questions are not resolved. So asset class, CBDCs and a services opportunity, those are the three ways that we feel we want to play and we need to play and we have the differentiated assets to do so.”

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