:quality(80)/business-review.eu/wp-content/uploads/2018/04/Mastercard.jpg "MasterCard offers cryptocurrency trading in your bank")
Main conclusions
- Mastercard Launches Program to Allow Regular Banks to Offer Cryptocurrency Trading to Their Customers
- The deal will mediate between their bank and the Paxos crypto platform.
- Investors who are not ready to jump into startups like Coinbase and Crypto.com should use cryptocurrencies.
Echoing a recent partnership between Google and Coinbase, Mastercard is offering itself as an intermediary that will allow large retail banks to offer cryptocurrency trading to their customers.
As part of the program, they will act as an intermediary between the bank and the Paxos crypto-trading platform. It's the same system that allows users to trade cryptocurrencies through PayPal, which uses Paxos to facilitate real-world transactions.
This is a big step towards expanding the cryptocurrency usage base, and many would-be investors are hesitant to invest their money in newer brands like Coinbase, Gemini, or Kraken.
While many of these companies have received billions in venture capital and have big names on their boards, they can't match the track records of banks like Wells Fargo or JPMorgan Chase.
As cryptocurrencies become more and more popular, it becomes clear that big players will be involved. This is somewhat ironic considering the invention of Bitcoin.
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How MasterCard Makes Cryptocurrency Trading Easier
The new MasterCard service will allow banks to offer cryptocurrency trading services without performing a transaction. The most important part of these relationships for banks is that they will allow them to outsource compliance and record keeping for the crypto side of their business.
This is an area fraught with regulatory issues that large, risk-averse financial institutions are trying to avoid.
In practice, people can manage the program by making transactions through their bank's app or platform, which are then routed through MasterCard and completed through Paxos. How this is implemented will vary from bank to bank, with some offering integrated functionality through their existing apps, while others separate cryptocurrencies from their customers' underlying financial assets.
For banks, this allows them to further expand their service offerings that can help attract and retain customers. The more products and services a customer has at one financial institution, the less likely they are to go elsewhere.
As you'd expect, Mastercard and Paxos will charge a fee to provide the service, although full details have not been released.
MasterCard has yet to reveal the names of the banks that have joined the program, but they say the pilot program will begin in the first quarter of 2023. After that time, the proposal is expected to roll out nationally and eventually globally.
Benefits for individuals
Cryptocurrencies have become more mainstream, but in many ways it's still a leap of faith.
Despite the billions of dollars spent on advertising for celebrities like Matt Damon and Kim Kardashian, the rights to the stadium names of the Los Angeles Lakers, Miami Heat, Los Angeles Chargers and Los Angeles Rams, Super Bowl advertising and countless other types of companies, the companies in question still do not have the same level of confidence as in the traditional financial system
After all, they ran into banks like Wells Fargo, founded in 1852, JPMorgan from 1871, and Goldman Sachs from 1869.
That was a big part of the story.
An agreement with banks such as MasterCard will allow these banks to offer cryptocurrency trading services to clients who would otherwise not consider investing. Customers trust these financial institutions and are therefore more likely to give away their hard-earned money in hopes of not getting scammed by real scammers.
However, there is no way to hide from the volatility that cryptocurrencies can experience. The industry was in the midst of a cryptocurrency winter, with prices plummeting after strong gains in the year of the pandemic.
Bitcoin has fallen over 50% this year, Ethereum has fallen nearly 60%, and many other digital currencies have risen.
Advantages and disadvantages of trusted third parties
Bitcoin was the first true cryptocurrency and was built on the assumption that it could transact without the need for a trusted third party. Until now, sending money or goods to someone else required an intermediary to verify transactions.
When you want to send money to a friend, you give instructions to your bank, who checks if you have enough funds, then sends it to your friend's bank, who then checks if the account exists, then deposits the money.
In many cases, especially in developed countries, this system does not necessarily create serious problems.
However, it depends on the intermediary bank. In many parts of the world, the financial system is not necessarily as sound and secure, which can lead to problems such as bank runs.
Other issues, like a corrupt government or hyperinflation, can also have a devastating effect on wealth and make you want to keep your money and assets outside of the traditional financial system.
Even people who don't face these issues find they can conduct their financial affairs in isolation, not following what banks or governments are doing.
This is all good for people who want to use their money in a decentralized way, but many don't. For the most part, cryptocurrencies are just another asset to invest in, potentially earning profits and improving your financial situation.
For these people, having a trusted third party is a good thing. It gives them a helpline they can call if they have a problem, an account that shows all of their assets in one place, and the ability to store their assets without having to memorize a 12-word phrase or carry thousands. dollars in bitcoin cash. . . . . on a USB stick.
The smart way to invest in cryptocurrencies
For investors looking to break into the cryptocurrency industry right now, it's a risky game. During the growth of crypto, almost everything is growing and growing rapidly. With the onset of winter, you can guess which currencies will experience the next boom and which will disappear altogether.
You don't have to look far to find investments in cryptocurrencies like Terra Luna, Celsius, and Voyager Digital, which show how quickly space investments can get pear-shaped.
But whenever you want to buy an investment asset, finding it at a lower price is a long-term game. It's a puzzle.
Luckily, to take the guesswork out of investing in cryptocurrencies, we've created our own AI-powered crypto kit. This set invests in a diverse mix of cryptocurrencies across multiple digital currency funds.
They invest in big names like Bitcoin and Ethereum while accessing smaller capitals which could include coins like Cardano, Litecoin, Solana, and Chainlink. It is automatically rebalanced every week by our AI to give you the best chance of risk-adjusted profits.
That's not to say it's not high risk, but day-to-day portfolio management is left to our sophisticated artificial intelligence and machine learning algorithms.
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