Mastercard: Stablecoin speed needs better infrastructure
Mastercard executive Matthew Driver says slow on-ramps and off-ramps could cancel out the speed benefits of stablecoin transactions.
At a glance
- Mastercard says stablecoins could speed payments but need better infrastructure on both ends of a transaction.
- A "stablecoin sandwich" means slow on-ramps and off-ramps can cancel out fast transaction speeds.
- Mastercard completed its BVNK acquisition in August and launched Global Money Platform this month.
Mastercard says stablecoins could speed up payments, but only if the infrastructure around them improves.
Matthew Driver, executive vice president of services for Asia Pacific at Mastercard, made the comments in an interview with CNBC. He warned that a "stablecoin sandwich" — a slow on-ramp into stablecoins, a fast transaction in the middle, and a slow off-ramp back into fiat currency — would not necessarily result in faster payments.
Stablecoins are cryptocurrencies designed to hold a steady value, typically pegged to an asset such as the U.S. dollar. Driver said they could be attractive for certain remittance corridors and less commonly traded currency pairs. Connecting real-time payment systems to stablecoin exchanges on both ends of a transaction could help, but market participants still need to enable the underlying infrastructure and use the technology effectively.
Adoption opportunities may vary by market. In Singapore, where retail payments are already highly efficient, stablecoins may have fewer consumer applications, while corporate payments could offer greater potential. Driver also pointed to smart contracts as a possible use case for corporate payments, allowing transactions to execute when certain conditions are met.
Interest in stablecoins has grown following the establishment of the U.S. GENIUS Act, according to Driver. Mastercard is expanding its digital assets involvement after completing its acquisition of stablecoin infrastructure provider BVNK in August. Earlier this month, Mastercard and BVNK launched the Global Money Platform, designed to help banks, fintechs and businesses manage payments involving traditional currencies and stablecoins through a single application programming interface.
Beyond payment speed, Mastercard is also exploring how to incorporate blockchain and identity data to build the same level of trust expected across other payment systems, Driver said.
Source: CNBC Top News.
Questions and answers
- What is the "stablecoin sandwich"?
- It describes a slow on-ramp into stablecoins, a fast transaction, and a slow off-ramp back into fiat currency, according to Mastercard.
- What did Mastercard recently acquire?
- Mastercard completed its acquisition of stablecoin infrastructure provider BVNK in August.
- Where might stablecoins have fewer consumer applications?
- In Singapore, where retail payments are already highly efficient, stablecoins may have fewer consumer uses.
