Mastercard launched an alliance with cryptocurrency wallet provider Bakkt to build a network to integrate cryptocurrency payments into its transfer systems.
Following the announcement of the news, Bitcoin rose 4% in value to $63,171. Bitcoin recovered slightly after a weekend drop that put it below $60,0000. The drop came after the crypto hit a record price of US$66,000 with the approval of several index funds to trade Bitcoin futures by the Securities and Exchange Commission.
Bakkt, which as of October 18 lists on the stock exchange with the ticker of BKKT, will provide its cryptocurrency wallet expertise and Mastercard will bring its expertise in credit systems to create a cryptocurrency credit and savings service.
According to the Bakkt statement, the company is working with Mastercard to issue Bitcoin debit and credit cards that can be used by users who have cryptocurrency wallets backed by Bakkt’s platform.
Mastercard also plans to integrate cryptocurrencies into its loyalty solutions. It would allow companies that have partnerships with the payment facilitator to provide loyalty bonuses to their customers in cryptocurrencies. This means that in the future consumers will be able to receive and make payments in Bitcoin at all companies that are integrated into the Mastercard network.
The latest New Payment Index survey by Mastercard, conducted among nearly 16,000 users from more than 18 countries, identified that 77% of millennials surveyed are interested in learning more about cryptocurrencies and 75% would be willing to use them if they understood them better.
According to Mastercard’s report with the pandemic, contactless payment technologies have become a catalyst for thousands of users to experiment with new payment alternatives, including cryptocurrencies. Forty percent of people surveyed plan to use cryptocurrencies next year, according to the report.
In a similar survey conducted by Bakkt in the U.S., among more than 2,000 respondents, the company identified that 48% of those surveyed had made a cryptocurrency purchase during the first half of 2021, while 32% of those who had not purchased claimed to be somewhat or very interested in buying cryptocurrencies during this year.
The partnership between Bakkt and Mastercard will boost the implementation of cryptocurrencies for the regular public and take them out of the realm of tech hobbyists where they have remained for the past few years.
According to Finbold, with a presence as dominant as Mastercard’s, the company will be lowering the barriers of entry to cryptocurrencies. Mastercard is yet another company in the financial world to join the cryptocurrency universe. As the payment facilitator, other companies like PayPal or banks like JP Morgan already issue their own digital currency.