Mastercard Partners with Paxos to help Banks offer crypto trading

Mastercard Partners with Paxos to help Banks offer crypto trading

On Monday, Mastercard announced a new program, called “Crypto Source,” that will make it easier for financial institutions and banks to offer crypto trading services to their customers. 

The program, expected to arrive in Q4 2022, is launched in collaboration with Mastercard’s existing partner Paxos Trust and will allow users to buy, hold and sell cryptocurrencies. It will function as a “bridge” between the trading platform Paxos and the financial institutions. 

Mastercard is expected to take care of regulatory compliances, including transaction verifications and anti-money-laundering services. Both compliance and security have been two major hurdles for banks wanting to get involved in crypto services. 

In a nutshell, Paxos will handle the custody and trading part, while Mastercard will help with integration and compliance requirements. 

“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,” said Ajay Bhalla, President, Cyber & Intelligence at Mastercard.

Paxos Trust already provides a similar kind of service to global payments company Paypal, which launched crypto services towards the end of 2020. 

“This exciting offering developed by Paxos and Mastercard will give FIs the fastest and most trusted way to offer safe, reliable crypto access for their consumers globally,” said the Head of Strategy at Paxos, Walter Hessert.

Even though investment heavy-weights such as Goldman Sachs and JP Morgan have dipped their toes into crypto by creating dedicated teams and offering crypto services to institutional investors, traditional finance companies have, until now, resisted offering crypto services to retail investors.

Making a case for itself, Mastercard pointed out that the 2022 Mastercard New Payments Index revealed about 29% of respondents globally held cryptocurrencies as an investment, and another 65% wanted their current trusted financial institution to offer crypto-related services. 

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Himan Mohapatra
Himan Mohapatra
Himan Mohapatra is an industry expert within the crypto-sphere and the primary journalist for Coinmash. He is an expert in finance and disruptive tech, such as blockchain.