· MasterCard and Visa are soon going to propose a solution for their cryptocurrencies interoperability problems.
· MasterCard recently announced a partnership with Bakkt, a digital wallet company based in Georgia, to begin offering crypto products and services to its partners.
· Thanks to this, companies will be able to offer crypto as rewards for transactions instead of the usual loyalty points.
· MasterCard users will also be able to use their cryptocurrencies to pay for products or services.
· Visa led the way in enabling payments through cryptocurrencies.
These days, most financial services companies are turning to virtual services since they know that if they do not keep up with the developments, then their businesses may be upended. The same financial institutions understand that going online is the future, which is why they have started investing in apps and other online services. Visa and MasterCard are also aware of this and they have begun introducing plans for integrating cryptocurrencies.
The cryptocurrency economy is about to reach newer heights and MasterCard and Visa organizations are not left behind.
Earlier this year, Visa announced its plans to work together with local cryptocurrency companies. This will involve combining payment solutions with cryptocurrencies. The company has continuously worked itself up to ensure that they fit in the crypto world from offering Visa cards that earn crypto rewards to collaborating with crypto companies.
Visa releases its plans for a Universal Payment Channel, popularly known as UPC. This concept will pave way for the company’s future digital financial payments. It also acts as a core whereby it interconnects multiple blockchains as well as allows secure online money transfers. This, in turn, will be able to solve interoperability challenges faced with cryptocurrencies. If you are familiar with cryptocurrencies, then you know how difficult it can be to transact one blockchain with another one.
As a result, this limits cryptocurrencies from reaching their full potential. For instance, imagine not being able to transfer money from your bank accounts simply because they are held up by other banks. This is what happens when using cryptocurrencies. Hence, the reason why various companies like Visa are trying to find the solution.
Another plan from Visa is its focus on Central Bank Digital Currencies (CBDCs), which are also known as govcoins. These would offer tons of benefits as the current digital currencies such as having cheap and fast transactions. Govcoins will also emit the risk of coin or volatility failure. However, unlike other digital currencies, these will bring new problems. For starters, govcoins will emit decentralization, which was the most important factor for Bitcoin. Additionally, it will also have security and privacy concerns.
So, what does this mean for crypto investors? Visa’s latest project Universal Payment Channel (UPC), is a long-term concept, which could help become the solution for transferring different digital currencies from different blockchain networks in the future. The proposed base layer for the UPC will be Ethereum but crypto analysts view this move as institutional adoption.
MasterCard Partners with Bakkt to Offer Crypto Solutions
Just recently, MasterCard announced that it has partnered with the Georgia-based digital currency company called Bakkt. The main purpose of this move is to make it possible for MasterCard to begin offering cryptocurrencies services and products to its users. One way this partnership will help is that companies will be able to offer crypto rewards instead of the normal loyalty points.
Customers will also be able to use their crypto holdings to pay for products or services. Furthermore, banks will be able to offer cryptocurrency debit and credit cards, which will be similar to what Visa is offering. And it is not only banks that would be able to do so, but also merchants on its network that will be able to integrate the digital currencies into their products.
MasterCard is looking forward to introducing Bitcoin and other cryptocurrencies into its banking platforms and payments. In the past, banks could give out loyalty points to their customers, which they could then use for Amazon purchases or hotel or airline bookings. But thanks to the recent company’s announcement, customers could soon be given cryptocurrency. This in turn will provide them with a digital asset that can shrink or grow in value.
What are the Benefits?
Moreover, this integration means that users can fill their digital wallets with cryptocurrencies instead of cash. Even hotel and airline points could then be converted to Bitcoin. According to Bakkt, this platform will allow customers to purchase any products with cryptocurrencies from coffee to sending gift cards to their loved ones.
This move comes at a time when cryptocurrencies such as Bitcoin have become a popular option for online transactions. The partnership will also change the way businesses operate as well as offer flexibility to thousands of users and merchants. On the other hand, since the price of cryptocurrency is extremely volatile, this could pose a big risk and customers could lose huge amounts of value.
At the same time, users should note that this move is not meant to recommend you to start using cryptocurrencies. It is your money, so you can opt to go the traditional or the digital way; it simply remains your choice. Nonetheless, MasterCard is doing so to help businesses, merchants, and customers move on the digital pathway.
For instance, customers will gain plenty of benefits from this move. They can be able to purchase products through their cryptocurrencies and even send, save, or store money in different options. Merchants will be able to receive new clients who prefer to use the digital wallet. It will also help build loyalty among clients and businesses. However, you should also keep in mind that not all cryptocurrencies will be supported by MasterCard.
Will Privacy be Compromised?
It is worth mentioning that MasterCard will offer the same safety as people expect from their credit cards. So, all your information will be private and secure. Secondly, the company will place strict compliance protocols, which will keep away any form of illegal activity in the payment network. Besides, these digital assets need to follow the laws and regulations according to their regions of operations.
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