Mastercard wants to become the “Venmo of crypto”: here’s how

Mastercard is decisively aiming towards the future of digital transactions and is doing so by betting on the blockchain. With an ambitious project that looks far ahead, the payment giant intends to build a completely new payment network, based on the world of digital assets, capable of replicating the effectiveness and spread of the card payment system developed over more than sixty years.

A new world of payments: the infrastructure will be digital

According to Raj Dhamodharan, executive vice president of Mastercard for blockchain and digital assets, the goal is to integrate the best of traditional finance with the innovation of decentralized finance (DeFi). The vision? To create a bridge that allows money to flow easily between the two worlds, relying on a structure capable of ensuring scalability, security, and regulatory compliance.

“What is missing today is a fully compliant and integrated on-chain consumer experience, similar to that offered by services like Venmo or Zelle in the United States.”

Dhamodharan explained.

Creating an intuitive system for digital money transfer is no small feat. The real challenge will be engaging financial institutions, which are crucial for the success of a network that, like all networks, increases in value as the number of participants grows.

The Multi-Token Network: Mastercard’s ecosystem for the blockchain

The heart of the strategy is the Multi-Token Network (MTN), launched by Mastercard in 2023. This new tool is designed to allow banks and financial players to access the blockchain and build their own digital services.

So far, Mastercard has already formed alliances with JPMorgan and Standard Chartered, collaborations that have led to the development of very concrete use cases, such as:

• Cross-border payments available 24/7;
• Tokenization of deposits and credits for the reduction of carbon emissions.

Dhamodharan argues that many banks are approaching the mondo crypto because they are attracted by the advantages of the technology and the new business opportunities it offers.

The favorable context: from Wall Street to Washington something is changing

The year 2022 was a challenging one for the crypto industry, marked by the failures of major entities like FTX or the collapse of the stablecoin terraUSD. However, today the general climate has changed. According to Dhamodharan, there is a new energy in the sector, driven by regulatory changes and greater openness from traditional institutions.

In the United States, for example, attention is paid to the signals coming from Washington. The appointment of Paul Atkins as the new chairman of the SEC has been received positively: during the Senate hearings, Atkins stated that one of the priorities of his term will be to build a clear and balanced regulatory framework for digital assets.

This new regulatory direction seems to ease the fears that for years have held back financial institutions from diving into the crypto world. Mastercard now hopes to tap into this new wave of interest.

Beyond paper: Mastercard for the crypto world

One of the most ambitious goals of the payments giant is to enable transactions between fiat and crypto for its over 3.5 billion cardholders worldwide.

Today Mastercard is already a key player with over 100 card programs focused on cryptocurrencies, including:

• Credit cards that return rewards in crypto;
• Prepaid cards to purchase digital assets;
• Solutions designed to simplify access to the world of digital currencies for consumers worldwide.

According to Dhamodharan, “the flow of capital and the spending capacity by consumers are key elements for the success of the entire digital asset ecosystem.”

The interest of institutional investors: real finance on blockchain

But the discussion is not limited to consumers. Mastercard is also looking with great interest at the world of institutional finance. The perspective is to tokenize real-world assets, such as money market funds and treasury bonds, making them digitally accessible.

A concrete example is the recent partnership with Ondo Finance, which tokenizes institutional financial assets and makes them available on blockchain. A move designed to facilitate operations such as trade finance and international payments.

This process requires new technological tools, as digital assets reside on decentralized public ledgers, unlike the private and centralized ledgers of traditional financial institutions. The challenge is to bridge this gap so that operations can be carried out with the same efficiency and security to which banks are accustomed.

A concrete commitment: investments, patents, and startups

Mastercard has shown a deep belief in this bet, investing energy and resources since 2015. In these years, the company has:

• Filed over 250 patents related to blockchain and digital assets;
• Supported 43 blockchain startups since 2021, through an acceleration program;
• Opened highly qualified job positions in the blockchain field, with salaries reaching up to $348,000 per year.

A commitment that demonstrates the desire to build, brick by brick, a solid infrastructure for the digital transactions of the future.

A new era for digital payments

The final goal for Mastercard is clear: to become what Venmo for P2P payments has been in the traditional world, also for the crypto world. By offering intuitive experiences, ensuring compliance, and collaborating with financial giants, Mastercard is positioning itself to write a new chapter in the history of the digital economy.

With a well-defined strategic project and the support of a transforming ecosystem, Mastercard is ready to lead the revolution of digital transactions on blockchain, bringing the same trust and accessibility of its payment network into the decentralized world of crypto.