Thursday, December 8, 2022

Mastercard Partners With Paxos To Foster Crypto Trading Services

Global payment and technology company Mastercard is now in partnership with New York-based financial institution Paxos to offer crypto services.

Precisely, they are designing a program that will help financial institutions offer crypto trading services to customers. Once it commences, Mastercard will act as the bridge between the crypto brokerage arm of Paxos and other banks.

Over time, banks have frowned at crypto trading mainly because of risk exposure and non-compliance of crypto firms to regulations. Therefore, Mastercard’s responsibilities to Paxos and the banks that signify interest in the model will include handling regulatory compliance and security.

Some customers have also displayed a level of skepticism about the volatility of cryptocurrencies like Bitcoin (BTC) and others.

This year, BTC has fluctuated severally, and at the time of this writing, is trading at $19,450. Compared to its all-time high of $68,000 in November 2021, BTC has lost more than half of its value. This is not to overlook the numerous hacks that the crypto industry suffered this year. Solana-powered decentralized platform Mango Market was one of the recently hit firms.

Mango Markets was attacked by Hackers less than a week ago and stripped of over $100 million in crypto assets. The perpetrators made use of a technique called oracle price manipulation.

Notably, they exploited an economic design flaw to temporarily spike up their collateral value. Thereafter, it took massive loans from the Mango treasury and withdrew various digital assets from the platform.

Mastercard Set to Compete With U.S Crypto Exchanges

However, all of these industry misfortunes have not totally erased the interest of customers in the cryptosphere. According to Mastercard’s Chief Digital Officer, Jorn Lambert, there is still a high demand for crypto trading services.

Although it was discovered from a poll that over 60% of interested customers will prefer to participate through their financial institutions.

“There’s a lot of consumers out there that are really interested in this, and intrigued by crypto, but would feel a lot more confident if those services were offered by their financial institutions. It’s a little scary to some people still,” Lambert said

The program will enter into the pilot phase by Q1 next year and also facilitate the process to enter more territories. Eventually, if the proposed model by Mastercard gets accepted by banks and other financial institutions, the crypto industry will become more competitive for Binance, Coinbase, and other exchanges operating in the United States.

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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