On February 10, Mastercard announced that it start supporting some crypto-currencies on its payment network. According to the payments giant, the inclusion of cryptocurrencies will allow customers to "save, store and send money in new ways" while opening up new opportunities for traders.
The announcement followed a presentation on January 30 in which Visa reaffirmed its intention to continue pushing for cryptocurrency payments and ramps , showing that the company has long-term plans for the industry. With the two credit card giants on board, it's safe to say that Bitcoin ( BTC ) is no longer just an experimental form of 'internet money', but rather a new class of assets in its own right - a class that is here to stay.
Mastercard and Visa's foray into crypto is just one example of the ever-growing barrage of traditional technologies and payment companies that is emerging. are launching into Bitcoin as an investment, payment method, or investment vehicle, but these two companies account for billions of payments made each year.
So what is it this means for Bitcoin in particularer and for crypto in general? Some say the industry may not be here yet, but this latest development could be the very beginning of general adoption. Tone Vays, Bitcoin analyst and organizer of the "Unconfiscatable" Bitcoin conference, told Cointelegraph:
The Guardian Effect: Let the Bulls In
When the announcement of Mastercard was made, Bitcoin was trading at around $ 46,400. Since then, the cryptocurrency has steadily grown to reach a new all-time high above $ 58,000, with news arguably playing a factor.
In addition, in the week following the announcement, the First Bitcoin Exchange Traded Fund in North America has been approved by the Ontario Securities Commission. During its first hours of trading, it approached $ 100 million in transaction volume .
A second Bitcoin ETF was subsequently approved by the Ontario regulator, and it is expected to reach $ 1 billion in assets under management d 'by the end of February. Additionally, the world's largest custodian bank, Bank of New York Mellon, revealed that it deploy a cryptocurrency custody service . And then the world's largest asset manager, BlackRock, confirmed it started to "dabble" into Bitcoin .
Not only that, allAll eyes are now on Bitcoin, both among traditional financial titans and Reddit retail investors. Ben Zhou, CEO of Bybit, told Cointelegraph that “Crypto Twitter seems to be the happiest corner of the social platform, with laser eyes and everyone from exuberant crypto accounts to the wo the most human. rich from rld to two members of US Congress, ”adding:
The Mastercard announcement came at a time when the number of confirmed payments per day on the Bitcoin network has been steadily increasing. The number of payments on the network is defined as the number of recipients receiving funds in a transaction.
The metric highlights the value of the Bitcoin network as a medium secure to transfer funds without a third party. Over the past 12 months, daily confirmed payments have gone from an average of around 500,000 to a high of 869,000.
What this mean for crypto
So what do the Mastercard and Visa efforts mean for the cryptocurrency world? As of the fourth quarter of 2020, There are 246 million Mastercard credit cards in the United States and 966 million worldwide, while Visa reports that 3.5 billion cards are used worldwide and that its network processese more than 140 billion transactions per year.
The two companies have different plans for how they will integrate cryptocurrency payments into the world of credit card transactions, and several questions have gone unanswered by their announcements, including on the exactly how the integration works.
While Mastercard's announcement made it clear that crypto is coming to the network this year, it doesn't say exactly when and which currencies will be available. The payments giant hailed in its announcement that stablecoins could be the first in line for its network, but other coins could follow.
In a blog post, Raj Dhamodharan, Executive Vice President of Digital Asset and Blockchain Products and Partnerships at Mastercard, lefthear the company will assess potential cryptocurrencies to include using its framework of "principles for blockchain partnerships", which it published after leaving the Libra association. It emphasizes consumer protection, stability and regulatory compliance.
The integration of Visa and Mastercard into the world of crypto should make it easier to use cryptocurrencies for daily payments, which could be seen as a step forward in the quest for mass of crypto adoption.
While it is not clear whether merchants will need to accept cryptocurrency payments or if those payments will be accepted by default, cryptocurrencies will essentially be available as a method of payment over 60 million merchants from all over the world. But the road to thewidespread adoption still has a long way to go. Arbel Arif, founder and CEO of Shopping.io - an online shopping aggregator offering cryptocurrency payment methods for retail shoppers - told Cointelegraph:
An increase in the demand could increase the supply squeeze 've been witne tapping the cryptocurrency markets and further helping prices rise. Until now, however, Mastercard only works with the Bahamian Sand Dollar, the world's first central bank digital currency.
In an announcement, the payments giant revealed a prepaid Mastercard allowing users to pay for goods and services with Sand Dollar anywhere Mastercard is accepted around the world. However, he hinted that cryptocurrencies like Bitcoin will be used in its network in the future.
Crypto debit cards are available
Visa and Mastercard have already worked with several cryptocurrency companies to issue cryptocurrency debit cards that allow users to pay for goods and services with their holdings from millions of traders around the world.
Coinbase, BlockFi, Binance, Nexo, Crypto.com and others have issued crypto debit cards, which often include cashback rewards in the form of cryptocurrency. Last year, Coinbase became a permanent member of Visa , even able to issue its own cards. Eric Stone, head of data science at data analytics firm Flipside Crypto, told Cointelegraph that many such announcements will follow soon, adding:
Cryptograp debit cardshics differ from normal Visa and Mastercard because of the exciting benefits offered to users, and cryptocurrencies themselves can act as a bridge between fiat exchange rates when traveling.
Most crypto debit cards are now already supported by mobile payment solutions like Apple Pay, Google Pay, and Samsung Pay. It is possible to manage which encryption Currencies are used to pay through a mobile application, making it easier to choose spending.
These existing crypto debit cards, however, often have relatively high fees associated with processing payments and converting crypto assets into fiat currency traders receive. In addition to this, some crypto debit card providers require users to put in large amounts of their own tokens to unlock the best rewards, but crypto projects prefeel certain benefits. Finally, only citizens of a select group of countries have access to the most popular cards.
How much more can Bitcoin earn?
While there are still many unanswered questions regarding Visa and Mastercard's approaches to processing cryptocurrency payments through their networks, it is clear that these companies that are just getting into the business The cryptocurrency space reinforces the legitimacy of the industry.
Since PayPal started letting users buy, sell, and hold cryptocurrencies on its platform, Bitcoin and other crypto assets have been more legitimized as their own class of assets which is now accepted by traditional financial companies.
A few years ago, in the mind of an average consumer, cryptocurrencies were primarily associated with darknet markets selling illegal products and with specs.uncontrollable ulations. Today, BTC is recognized as a store of value, so much so that listed companies invest in it. So, has Bitcoin finally succeeded? Is general adoption here? Sur Yavin, managing partner of Cointelligence Fund, told Cointelegraph that crypto is indeed "gaining more momentum than ever before," adding:
MicroStrategy a invested $ 1.145 billion to buy 71079 BTC , now worth around $ 3.8 billion at the time of writing. Tesla announced an investment of $ 1.5 billion, with the electric car maker market cap exceeds $ 1 trillion .
While Bitcoin now appears to be as popular as ever, the data shows otherwise. According to data a > From Google Trends, search interest in "Bitcoin" is still below levels seen in 2017, despite significant price increases and growing adoption by businesses.
This probably means that large investors and corporations are driving the market up, while retail investors are largely staying on the sidelines. However, in whatRegarding the outlook of the general public, acceptance of these giants may change the way retail buyers view cryptocurrencies. According to Arif, large companies acting as "a bridge that connects the common buyer to cryptocurrencies like this is essential for the entire industry, as crypto is taken seriously around the world as a mode of trading. payment.