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Cryptocurrencies have exploded into the mainstream over the past couple of years and represent an existential threat to these payment providers. In reality, these institutions can still serve as useful bridges between crypto and traditional finance.
Mastercard's Patent 💳
- In June 2021, Mastercard announced that they are working to provide cards to crypto institutions to make it easier for users to switch from crypto to fiat
- Based on the patent, it looks like the card payments will be implementing technology from Bitcoin - multisignature wallet
- Basically, when you make a payment for a point-of-sale device, the transaction will require multiple keys to authorize it
- Those signatures may be provided by Mastercard and the institution behind the card like BlockFi for example
Why is this interesting?
- Enabling cryptocurrency transactions with cards means that the legacy POS systems can be used to facilitate payments via crypto which can speed up the adoption phase
- With more and more people getting crypto rich, Mastercard providing crypto cards may enable crypto-natives to use their digital assets in the real world
The CEO of Shopify, Tobi Lutke has this famous saying: "Amazon is trying to build an empire and Shopify is trying to arm the rebels.” With this patent, it does feel like Mastercard is trying to arm the rebels of the future while taking a slice of the growing ecosystem at the same time.
Although I think that these payment providers need to go but the truth is we still need them to create a degree of familiarity for consumers and help facilitate wider adoption.
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