Mastercard is fully embracing blockchain technology. Recently, the leading payments company introduced a debit card in partnership with MetaMask that allows users to spend self-custodied tokens at any establishment or website that accepts Mastercard (which is virtually everywhere).
“We’re making this crypto purchasing power available at our 100 million-plus acceptance locations,” stated Raj Dhamodharan, Mastercard’s head of crypto and blockchain, in an interview with Decrypt. “If consumers are interested in using it, we want to facilitate that in a secure manner.”
For security reasons, the new MetaMask Card does not support most cryptocurrencies. It is not possible to use it to purchase a plane ticket with Pepecoin or grab a sandwich with SHIB. The card is only compatible with leading stablecoins such as USDT, USDC, and wrapped Ethereum.
As traditional finance and blockchain technology continue to merge, stablecoins have gained popularity as a reliable method of bridging off-chain and on-chain worlds. These stablecoins are tied to the value of fiat currency held in reserve.
While Mastercard believes in the future of on-chain traditional finance, the company’s leadership is cautious about stablecoins leading this transition.
“We cannot insist that everything must be converted into stablecoins before enabling commerce,” expressed Dhamodharan. “That would create a significant obstacle for the industry.”
Dhamodharan and his team are working on an alternative system to stablecoins that prioritizes payment services like Mastercard and traditional banks over crypto companies like Circle and Tether.
A crucial element of their plan is leveraging bank deposits, which already exist in digital form but not on-chain. Dhamodharan estimates that over $15 trillion worth of digital bank deposits exist in the United States alone.
Last year, Mastercard unveiled the Multi-Token Network (MTN) program, which allows bank deposits to symbolically exist on-chain and support commerce without requiring banks to integrate Ethereum into their systems. The company recently launched a pilot program in Hong Kong to tokenize carbon credits using this system.
“I don’t foresee traditional bank deposits becoming public chain assets,” Dhamodharan noted. “But they should be usable for purchasing assets on a public chain.”
Mastercard predicts that in the near future, real-world assets like real estate and commodities will transition to digital and exist on-chain, potentially unlocking trillions of dollars in value for digital economies. However, this transition will only be successful if individuals and institutions worldwide have easy access to funds for this new financial landscape.
While crypto firms have been developing on-chain systems for years in anticipation of this shift, Mastercard believes that the masses may not be eager to adopt new currencies and deal with additional intermediaries, even if they eventually use smart contracts to buy houses.
“Traditional banking drives our economies today,” Dhamodharan emphasized. “There’s an established regulatory framework that we rely on.”
“Currently, traditional banking doesn’t fully benefit from technology,” he added, “but we believe we can change that.”