Mastercard has introduced a new method for performing fiat-to-crypto transactions on-chain, following a new partnership with Chainlink.
Announced on June 24, the collaboration will enable Mastercard’s 3.5 billion card holders to access Swapper Finance, a non-custodial crypto and digital asset wallet to facilitate fiat-to-crypto conversions.
Swapper Finance is powered by Uniswap, a decentralised exchange built usingChainlink’s technology. Chainlink provides the data and interoperability features that connect traditional fiat systems with crypto assets, enabling real-time, on-chain conversions.
To ensure regulatory compliance, Zero Hash and Shift4 Payments have been brought in to manage the transactional and compliance layers. Shift4 will oversee card processing, while Zero Hash ensures transactions meet the regulatory requirements of each user’s local market.
“This is what crypto looks like when it’s ready for the real world,” said Raj Dhamodharan, EVP of Blockchain and Digital Assets at Mastercard.
“In coming together with Chainlink, we’re at the start of a very exciting journey to truly revolutionise the way we use cards for on-chain finance. We’re meaningfully accelerating the broader adoption of digital assets at scale – enabling billions of people to participate in the crypto economy with the cards in their wallets today.”
A new way of converting to crypto
Users can convert their fiat currency to a plethora of cryptocurrencies and stablecoins, including ETH, USDC and PYUSD, and also sell their crypto holdings back to fiat.
When a transaction is initiated, Shift4 submits the payment request to Mastercard for authorisation and handles the real-time fiat-to-crypto conversion. Zerohash provides the delivery of the intermediary crypto token – such as a stablecoin – resulting from the fiat conversion, transferring it to Swapper’s smart contracts.
At the same time, Chainlink validates the user’s request and sends the necessary instructions to Swapper’s smart contracts. These contracts then execute a token swap on a decentralised exchange, such as the Uniswap protocol, based on the parameters received from Chainlink. The user receives the desired token in their wallet.
“This is the type of traditional finance and decentralised finance convergence that Chainlink was built to make possible,” commented Sergey Nazarov, Co-Founder of Chainlink.
“I’m excited about Chainlink’s ability to enable this critical connection between the traditional payments world and more than 3.5 billion Mastercard cardholders, directly into the next generation trading environments of on-chain decentralised exchanges. This was a complex and multilayered collaboration, which I was thrilled to see the Chainlink community help make possible.”
