Mastercard (NYSE 🙂 and Bakkt announced this week that they have formed a strategic alliance in order to allow merchants, banks, and fintechs across the U.S. to offer a broad range of cryptocurrency services. Mastercard and Bakkt have created a solution suite called Crypto-as a Service (CaaS). This allows Mastercard partners to allow their customers to purchase, sell, hold, or transfer digital assets via custodial wallets. These digital wallets, powered by Bakkt’s platform, will streamline the issuance and use of crypto debit cards and credit cards.

“Mastercard is committed to offering a wide range of payment solutions that deliver more choice, value and impact every day,”
Sherri Haymond was executive vice president of Digital Partnerships at Mastercard.

“Together with Bakkt and grounded by our principled approach to innovation, we’ll not only empower our partners to offer a dynamic mix of digital assets options, but also deliver differentiated and relevant consumer experiences.”
This news will likely be a significant catalyst for mass adoption of crypto by both merchants and consumers – even more so than when PayPal (NASDAQ:) announced its addition of a handful of cryptocurrencies to its platform. This graphic shows the increasing popularity of Mastercard credit card cards in the United States and around the globe since 2015.

Mastercard announced that they will integrate cryptocurrency into their loyalty programs. This means customers can earn rewards and convert crypto to buy products.

According to the Bakkt U.S. Consumer Crypto Survey1 of 2,000 U.S. Consumers, nearly half (48%) of respondents reported purchasing crypto in the first six months of 2021, while 32% of those who didn’t are either very or somewhat interested in doing so before the end of year. According to Mastercard New Payments Index 77% of millennials said they were interested in learning about cryptocurrency. 75% stated they would use it if they knew more.

To The Flipside

• This crypto solution is expected to drive adoption but it also will lead fees, delays and intermediaries between consumers and cryptocurrencies.
• The whole point of Satoshi Nakamoto’s white paper in 2009, that conceptualized and blockchain technology, was to remove the need for financial middlemen.

Why you should care

It could be a turning point as crypto has been accepted by one of the most trusted and widely-used payment methods on the planet and integrated into the business model.

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