Mastercard and Binance have announced a partnership that could prove pivotal for crypto payments in the retail sector.
The partnership between the card giant and the crypto exchange platform aims to introduce cryptocurrency payments to shoppers as an alternative to fiat currency, with the initial rollout of the collaboration beginning in Argentina, with plans to expand in the future.
“We can unlock the full potential of blockchain technology when we make it easier to access and easier to use,” stated Mastercard CEO, Michael Miebach in a LinkedIn post. “One way we do that is by bringing crypto to everyday purchases.”
This announcement comes after both companies ventured into the first launch of their crypto debit card in Argentina, marking it the first country to debut the product in the South American market.
The ‘Binance Card’ uses Binance’s blockchain technology to combine with Mastercard’s merchant network for customers to make cash conversions from fiat to crypto currencies at the point of sale transaction.
There has been a recent influx and need for crypto payments as an alternative to fiat currency payments in recent years. Payment solution platform Paysafe found in its research that 80% of its crypto wallet users prefer to spend via their choice of cryptocurrency.
There have also been legal movements being made in the regulatory department regarding crypto in the UK. The Financial Conduct Authority (FCA) granted crypto exchange platform Crypto.com regulatory approval to run as a digital asset business to offer its range of services.
Binance is yet to gain the same approval from the FCA, as Mastercard reaffirms that it does not currently settle payments to merchants in cryptocurrencies, but does offer avenues for fiat to crypto conversions to make purchases.
Anton Chashchin, Managing Partner of Bitfrost, comments that major financial leaders are not diturbed from forgoing ventures into digital assets.
He said: “This move from Mastercard and Binance is another example of crypto integration. The perception of cryptocurrencies among financial leaders has been shifting for some time, with this being the latest of a growing number of partnerships and acquisitions between a crypto firm and a major financial firm.
“As opposed to being put off by the market downturn this year, many institutional investors, such as Black Rock, ABRDN and Charles Schwab, have seen it as an opportunity to move into the market.
“An understanding of the industry’s prospects is prevailing and now virtually all leading financial companies are expanding into digital assets in some capacity. This has significant long-term implications and it is the enthusiasm of institutions that will play a critical role in lifting the crypto market out of its downturn eventually.”