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Mastercard launches platform to help banks offer crypto trading

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(Kitco News) - Global payment processor Mastercard has unveiled the launch of Crypto Source, a new program that will enable financial institutions to begin offering secure crypto trading services to their customers.  

The new service is being offered in partnership with Paxos and will allow Mastercard's financial institution partners to gain access to “a comprehensive suite of buy, hold and sell services for select crypto assets, augmented with proven identity, cyber, security and advisory services,” the announcement from Mastercard said

Mastercard has chosen to launch the new service to help deal with the reluctance on the part of traditional banks to enter the crypto-trading space. Crypto Source will allow Mastercard to assist in maintaining compliance with crypto-related rules, verify transactions, and provide anti-money-laundering and Know Your Customer checks.

Crypto Source also integrates Mastercard Crypto Secure, “a first-of-its-kind technology solution” that will help bring additional security to the crypto ecosystem and support card issuers in their compliance with complex regulations.

“At Mastercard, trust is our business. What we are announcing today is a connected approach to services that will help bring users safely and securely into the crypto ecosystem,” said Ajay Bhalla, President, Cyber & Intelligence at Mastercard. “Our recent investments in this space, such as the acquisition of CipherTrace and Ekata, are providing us with a unique set of capabilities to help provide our customers and consumers with the most technically advanced solutions available in the market.”

With this new addition to Mastercard’s suite of crypto-related offerings for banks and fintechs, the firm now supports the purchase, sale and holding of select crypto assets; offers comprehensive security management; allows for crypto spend and cash out capabilities through services like crypto cards; and helps with crypto program management design, product development, marketing consultancy services and technology implementation.

Paxos Trust, a leading regulated blockchain infrastructure platform, has been tapped by Mastercard to help with this endeavor. The partnership with see Paxos  provide crypto-asset trading and custody services on behalf of the banks, while Mastercard will leverage its technology to integrate those capabilities into banks’ interfaces

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“Our commitment is simple – to explore crypto and the underlying digital assets technology to support consumer choice in payments,” said Jorn Lambert, Chief Digital Officer at Mastercard. “We’re excited to build on our long-term partnership with Paxos – co-innovating to bring safe and secure technology to financial institutions. Our crypto product innovations will provide choice at scale and continue to bring one-of-a-kind opportunities to financial institutions as they seek to offer new, advanced services to their customers.” 

Walter Hessert, Head of Strategy at Paxos, said the new partnership “will give [financial institutions] the fastest and most trusted way to offer safe, reliable crypto access for their consumers globally.” 

This latest development adds to Mastercards efforts over the past few years to bring new services and capabilities that help make crypto more accessible, safe and secure. Through the integration of new technologies with Finicity, Ekata, RiskRecon and CipherTrace, Mastercard has provided eligible financial institutions the opportunity to directly manage crypto asset investments for consumers.

Mastercard Crypto Source is currently being prepared for pilot programs that are planned to launch in Q1 2023. Additional details on its broader availability will be made available at a later date.

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