This means that any of the thousands of banks and merchants on Mastercard network can soon use crypto in their products, CNBC has discovered.
A bitcoin wallet, credit or debit cards that earn bitcoin rewards, or loyalty schemes where airline or hotel points can be exchanged for bitcoin.
To do so, the payments network is teaming with Bakkt, a crypto startup recently spun off by ICE, which will provide custodial services for customers who join up.
“We want to make it easier for our partners to use crypto services,” said Sherri Haymond, Mastercard’s executive vice president of digital partnerships. The Baktt platform allows our partners to offer their clients the opportunity to buy, sell, and hold bitcoin.
The news could significantly expand how ordinary Americans earn and spend bitcoin and other cryptocurrencies. Along with Visa, Mastercard has global agreements with over 20,000 financial institutions. Mastercard claims 2.8 billion cards in use.
Cryptocurrency has soared this year
The original cryptocurrency has soared this year, reaching a record price of over $60,000 this month. This month, US regulators approved the first bitcoin-linked ETFs, and huge institutional investors like Pimco stated they were considering trading crypto.
According to Haymond, Mastercard clients have asked the network for help providing crypto services. So banks can keep clients on their own platforms instead of losing money to crypto exchanges.
Bakkt’s stock, which went public last week, soared 234 percent on the announcement. Later Monday in Las Vegas, Mastercard and Bakkt will announce their cooperation.
According to Bakkt CEO Gavin Michael, the agreement allows businesses and restaurants to give bitcoin rewards instead of standard points. Customers can convert existing points into crypto at a rate determined by the collaborating companies, he said.
“We’re lowering the obstacles to entry,” Michael stated in an interview. We let you put an idle asset on your balance sheet to work, so it’s a simple way to get started.