Mastercard has teamed up with blockchain infrastructure platform Paxos on a programme designed to help banks and fintech companies offer their customers crypto trading services. The payments company said it is preparing to pilot a service called Crypto Source, which provides infrastructure to financial institutions to facilitate the buying, selling, and holding of cryptocurrencies. Mastercard will serve as the bridge between banks while Paxos will provide “crypto-asset trading and custody services on behalf of the banks,” the company said in a press release.
Through the “Crypto Source” program, users can buy, hold, and sell cryptocurrencies, complemented by Mastercard’s proprietary Crypto Secure solution. The payment giant will assist banks with crypto compliance rules, verify transactions, prevent money laundering, and monitor identities. The program is expected to launch in Q4 of 2022.
We’re proud to work with @Mastercard, easing the way for banks & fintech to add crypto to digital wallets. In a new partnership, Mastercard will leverage Paxos to seamlessly allow financial institutions to buy, sell and hold crypto on behalf of clients. https://t.co/cVpNQ0Crvw
— Paxos (@PaxosGlobal) October 17, 2022
A Mastercard survey found that 29 percent of respondents globally hold cryptocurrency as an investment, with another 65 percent indicating a preference for crypto-related services to be provided by their current financial institution.
The move comes weeks after Mastercard launched Crypto Secure, a software service that allows banks to identify and potentially block customer purchases from cryptocurrency exchanges that have been linked to fraud.
“At Mastercard, trust is our business. What we are announcing today is a connected approach to services that will help bring users safely and securely into the crypto ecosystem. Our recent investments in this space, such as the acquisition of CipherTrace and Ekata, are providing us with a unique set of capabilities to help provide our customers and consumers with the most technically advanced solutions available in the market,” said Ajay Bhalla, President, Cyber and Intelligence at Mastercard.
Paxos offers similar services to PayPal, which launched crypto services in late 2020. The platform is known for providing blockchain infrastructure that allows other companies to offer crypto-related products and services.