Cryptocurrencies are becoming integrated into the world payments system.
Visa and Mastercard have advanced plans to accept cryptocurrency-based transactions on their respective networks later this year.
In February, Visa partnered with digital neobank First Boulevard, which will pilot Visa’s crypto application programming interfaces (APIs) to purchase, trade, and provide custody services for bitcoins held by federally chartered digital asset bank Anchorage.
“With this pilot program, we want to extend the value of Visa to our neobank and financial institution clients by providing an easy bridge to crypto assets and blockchain networks,” said Jack Forestell, chief product officer at Visa, in a prepared statement. Visa anticipates releasing the new features into production sometime this year.
Meanwhile, competitor Mastercard also plans to support directly controlled digital currency payments on its payment network later this year.
The credit card giant hasn’t named which digital currencies it plans to support, but released criteria for the currencies it would consider. Any currency under consideration would have to provide strong consumer protection, deliver a level playing field for all stakeholders and fully comply with all financial regulations of the jurisdiction in which Mastercard’s network operates, according to company officials.
“If companies were on the sidelines about whether or not they should have a cryptocurrency strategy or understand them and look for opportunities to use them, this is a pretty good signal that someone who makes corporate payments should look at cryptocurrencies,” notes David Shipper, a senior analyst at research firm Aite Group.
“The fact that Visa and Mastercard are making such a bold move really says that they see this as an opportunity to capture payment volume,” adds Shipper. “In some ways, it also legitimizes cryptocurrencies as a competing form of payment.”