Mastercard Says Stablecoin Payments Need Better Infrastructure to Deliver on Speed Promise

Mastercard says stablecoins could make cross-border payments faster and more efficient, particularly in remittances and less liquid currency markets, but warned that gaps in the infrastructure connecting digital assets to traditional money could undermine their advantages.

The payments giant sees opportunities to use stablecoins, cryptocurrencies designed to maintain a relatively stable value by tracking assets such as the US dollar, in transactions where conventional payment systems remain slow or expensive.

Matthew Driver, Mastercard’s executive vice president of services for Asia Pacific, told CNBC that stablecoins could be useful for certain remittance corridors and less commonly traded currency pairs. Yet he cautioned that a transaction can lose its speed advantage if converting traditional money into stablecoins at the beginning, and converting it back at the destination, takes too long.

“You don’t want to have a ‘stablecoin sandwich,’” Driver said, describing a process in which a slow conversion into stablecoins is followed by a fast blockchain transaction and then another slow conversion back into fiat currency.

Blockchain technology can facilitate rapid transfers between digital wallets, but the overall payment experience also depends on exchanges, liquidity providers, banking connections and the systems used to settle funds in local currencies. That is considered a challenge.

Without efficient connections between those components, a faster digital transfer may do little to reduce the time required for a recipient to access usable money.

Driver said linking real-time payment networks to stablecoin exchanges at both ends of a transaction could help improve speed. But he stressed that the supporting infrastructure must be developed and made usable by the institutions and businesses involved.

This requirement is essential to cross-border payments, where a transaction may involve several intermediaries, currency conversions and settlement arrangements. A stablecoin could move quickly across a blockchain while the surrounding processes remain constrained by local banking hours, liquidity availability or the time needed to convert digital assets into spendable currency.

But the practical value of stablecoins for businesses lies in more than transaction speed. They also need predictable settlement, sufficient liquidity, reliable access to local currencies, and confidence that the receiving party can use the funds without unnecessary delays or additional costs.

The economics may differ considerably between markets. Driver cited Singapore as an example of a country where consumer payments are already highly efficient, limiting the potential advantages of stablecoins for routine retail transactions.

Corporate payments, by contrast, could offer more opportunities. Businesses conducting international transactions may have different requirements from consumers, especially when payments involve multiple jurisdictions, complex settlement processes, or contractual conditions.

Smart contracts could provide another application. These programmes can execute transactions automatically when specified conditions are met, potentially allowing companies to link payments to agreed milestones or other contractual requirements.

Such arrangements could reduce manual processing and help coordinate payments with business activity. Their effectiveness, however, is determined by the quality of the underlying data, the reliability of the systems involved, and the legal enforceability of the relevant agreements.

The broader implication is that stablecoins may be most useful where they address a specific weakness in existing payment arrangements. In markets where conventional transfers are already fast and inexpensive, replacing the payment mechanism may deliver limited benefits unless the technology also improves automation, settlement or business processes.

Mastercard Expands Its Digital-Asset Infrastructure

Mastercard is increasing its involvement in digital assets as financial institutions and businesses explore how stablecoins could fit into existing payment networks.

Interest in the sector has risen following the establishment of the US GENIUS Act, which has helped bring stablecoin regulation further into the policy and commercial discussion. Greater regulatory clarity can encourage institutions to evaluate digital-asset products, although it does not by itself resolve operational challenges or guarantee widespread adoption.

Mastercard completed its acquisition of stablecoin infrastructure provider BVNK in August. Earlier this month, the two companies launched the Global Money Platform, designed to help banks, fintech companies and businesses manage payments involving traditional currencies and stablecoins through a single application programming interface, or API.

The platform aims to simplify access to payment services spanning conventional money and digital assets. An API can allow businesses to integrate payment functionality into existing systems without building every connection independently, potentially reducing the complexity of working across different payment networks.

This approach offers Mastercard a way to participate in stablecoin-based transactions while connecting them to established financial services. Rather than treating stablecoins as a separate payment ecosystem, the company is positioning its infrastructure to accommodate transactions involving both digital assets and traditional currencies.

That strategy also reflects the importance of interoperability. Stablecoin adoption at scale requires different providers, payment systems, and financial institutions to work together. If businesses must navigate disconnected platforms or establish separate relationships for each market, the administrative burden could offset some of the efficiency gains.

Trust remains another requirement. Driver said Mastercard is looking beyond transaction speed to incorporate blockchain and identity data in ways that maintain the level of confidence expected from other payment systems.

The challenge is to preserve the transparency and technical advantages of blockchain-based transactions while providing the identity checks, security and reliability required for mainstream financial activity. Businesses and financial institutions must be able to establish who is involved in a transaction, assess relevant risks and operate within applicable compliance requirements.

Stablecoins consequently present both an opportunity and an infrastructure challenge for established payment companies. Their ability to move value rapidly could improve selected cross-border and corporate transactions, but speed at the blockchain layer is not enough to transform the entire payment process.

However, Mastercard’s investment in BVNK and its new platform is seen as an indication that the competition will increasingly center on connecting digital assets to existing financial systems.