Bitcoin’s big moment: Mastercard jumps on the bandwagon

The company announced late Wednesday that it would support “selected cryptocurrencies” directly on its network at a later date.

“Our philosophy on cryptocurrencies is simple: it’s about choice,” Raj Dhamodharan, executive vice president of Mastercard, wrote in a report late Wednesday. “Mastercard is not here to recommend that you use cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value – traditional or crypto – as they please.”

Although Mastercard had little information on how customers can use bitcoin, the company said it would work this way: if someone wanted to buy an item with a cryptocurrency, Mastercard’s crypto partners would convert the digital currency into traditional currencies. convert and then send out. them over Mastercard’s network.

This change “will enable many more merchants to accept crypto” as well as “eliminate inefficiencies so that consumers as well as merchants avoid switching between crypto and traditional to make purchases,” Mastercard said.

This is an important milestone for bitcoin, which is slowly penetrating Corporate America after years of skepticism.
On Monday, bitcoin rose to a record high of more than $ 44,800 at the time. Tesla (TSLA) said he would soon accept bitcoin as payment for his vehicles, and announced that he had bought $ 1.5 billion in bitcoin as part of his cash holdings. Digital pay giants Square (SQ) and PayPal (PYPL) recently started allowing users to trade bitcoin.

But Mastercard will still be the most important platform of bitcoin.

And Wednesday’s news led to the recent rally bitcoin (XBT), which increased it by 3% early Thursday, reaching a record earlier in the day. Bitcoin gained about 300% last year.

Mastercard’s customers are already using its cards “to buy cryptocurrencies, especially during the recent increase in value of bitcoin,” the company said in a statement. The company said that not all cryptocurrencies would be included, and although it did not specify that bitcoin would be one of the accepted ones, it was the only currency that Mastercard cited by name.

“We are also seeing users increasingly take advantage of cryptocurrencies to access these assets and switch to traditional currencies,” Mastercard added.

Meanwhile, BNY Mellon – the oldest American bank, whose history dates back to Alexander Hamilton’s founding of Bank of New York in 1784 – announced on Thursday that it has formed a unit for ‘digital assets’ that will help customers address needs. associated with the growth of digital assets, including cryptocurrencies, later this year at an unspecified time.

Customer demand and clearer regulation ‘provide a tremendous opportunity for us to expand our current service offering to this emerging area,’ says Roman Regelman, Mellon’s chief asset officer and head of digital.

The Bitcoin rally is not enough to dethrone the powerful dollar
In November, Rick Rieder, chief investment officer for fixed income at BlackRock (BLK), one of the most powerful asset managers in the world, said he can see bitcoin replacing gold as an investment instrument.
But others continue to question its value. Last month, Michael Hartnett, chief investment officer at Bank of America Securities (BAC), referred to the recent rally in bitcoin as “the mother of all bubbles.”

– CNN Business’ Paul R. La Monica Contributed to This Report

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