Mastercard is integrating cryptocurrencies into its payments systems, through a new partnership with crypto firm Bakkt. This includes bitcoin wallets but also extends to credit and debit cards that spend digital assets, and even loyalty programs that can convert airline or hotel points into bitcoin.
In short, cryptocurrency is getting a lot easier to use.
If you’ve been keeping up with the news over the past few years, this is no surprise — bitcoin and other cryptocurrencies have been tech industry buzzwords for even longer than that, and the movement is picking up steam. Here’s what that means.
What Does Mastercard’s Partnership with Bakkt Mean?
The partnership’s with Bakkt — a cryptocurrency firm that will handle the backend custodial services required to support crypto.
The general reasoning behind the decision is in line with the goal of a payments service: Helping customers buy and spend with as large a range of options as possible.
“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 with CNBC. “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 partnership is a big deal because Mastercard is a dominant global payment network — cryptocurrencies are now popular enough that the biggest players are folding them into how they operate.
The Future of Crypto
This new big partnership is a sign that cryptocurrencies are here to stay, at least for the immediate future.
At the same time, it’s a sign that one of the biggest reasons to adapt cryptocurrencies — the freedom they offer from centralized gatekeepers like payment networks — will become less and less true the more people are using them. If you’ve seen the show Mr. Robot, you probably saw that coming. Institutions have a habit of absorbing the upstarts, and the financial industry’s no different.
The new currencies aren’t just like the previous one, though: There’s also the massive environmental impact of mining and using cryptocurrencies. The energy needed for one day of mining bitcoin alone is equal to a full shipment of AA batteries on the biggest ship on Earth.
— Kira Bindrim (@KiraBind) June 25, 2021
With this new announcement, another big spending lever has opened up, allowing Americans to buy and spend cryptocurrencies faster than before through the 2.8 billion or so Mastercards in circulation today. We’ll also see far more shipping containers’ worth of energy spent each day in the process.