Mastercard has partnered with Asia Pacific-based cryptocurrency services platforms Amber Group, Bitkub, and CoinJar to launch payment cards, which will let users worldwide convert digital tokens into traditional fiat currency.
The move by the financial service provider is spurred by the growing adoption of cryptocurrency, taking the financial world by storm.
Though China opted out of the trend, preferring eCNY, its Central Bank Digital Currency (CBDC), the Asian region has opened its arms to the crypto evolution.
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Mastercard’s data shows that 45% of Asia Pacific customers have plans to use cryptocurrency in 2022. It is one of four emerging payment methods, alongside QR codes, biometrics, and contactless, with 94% of consumers considering using at least one of them.
Mastercard is choosing the three crypto companies as its first partners in the Asian Pacific region, as it pushes the Mastercard global crypto card program. Amber Group has a presence in South Korea, Taiwan, and Hong Kong, while Bitkub and CoinJar operate in Thailand and Australia, respectively.
In July, Mastercard got trapped by the crypto enthusiasm, such that it announced plan to incorporate a crypto-powered service into its system globally.
That means, instead of directly transferring cryptocurrencies to a merchant, customers can use cards to instantly convert their cryptocurrencies into traditional fiat currency, which can be spent anywhere Mastercard is accepted, whether online and offline. The currency will always enter Mastercard’s network as traditional fiat currency.
“Cryptocurrencies are many things to people—an investment, a disruptive technology, or a unique financial tool. As interest and attention surges from all quarters, their real-world applications are now emerging beyond the speculative,” said Rama Sridhar, Mastercard’s executive vice president for digital and emerging partnerships and new payment flows for the Asia Pacific.
Although a large section of the world has embraced the cryptocurrency frenzy, others are yet to come in terms with it. And some governments are towing the China path while others are drawing regulatory policies that will keep the market in check.
For instance Nigeria, Africa’s largest economy, is embarking on an onslaught against cryptocurrency traders in the country, following the launch of its CBDC last month. The Central Bank of Nigeria (CBN), had earlier in the year, banned all regulated financial service providers from handling crypto-related transactions, forcing the teeming number of Nigerian crypto users, especially the youth, to Peer-to-Peer (P2P).
In addition, in a move seen as a measure to promote the newly launched CBDC dubbed eNaira, the central bank has directed banks to freeze accounts suspected of dealing with cryptocurrency. This means that Mastercard’s global cryptocurrency program is already prohibited in Nigeria, and the country is thus sidelined from the benefits, including financial inclusion.
Nigeria has a huge payment market that is adopting new payment methods in large volumes. Data from Mastercard shows that 96 percent of consumers in Nigeria are likely to consider using at least one emerging payment method in the next year.
The report also found that millennials were more willing, compared with the general population, to use and learn about cryptocurrency, a situation evident in the number of Nigerian youths who have embraced cryptocurrency.
Bitcoin on Monday reached all-time high above $68,000, putting the entire cryptocurrency market’s value above $3 trillion and further stoking the frenzy that has characterized the market in recent times.
Robinhood Market, a free financial service platform that helps everyone to buy and trade stocks, said on Tuesday that it has 1.6 million people on the waitlist for its cryptocurrency wallet, up from 1 million just a few weeks ago.
The leap is an indication of wide adoption of cryptocurrencies buoyed by the introduction of new features such as decentralized finance (DeFi), non-fungible token (NFT) and exchange-traded fund (EFT) to the blockchain system.
Though many countries are, like Nigeria, concerned about volatility and the use of cryptocurrencies to facilitate money laundering, unlike Nigeria, they are positioning themselves to grab a share of the multitrillion dollar economy that the burgeoning cryptocurrency industry has become.