- The trial will enable crypto to fiat currency conversions
- Investors can spend their cryptocurrency assets more easily
- Circle USDC will serve as a bridge between the cryptocurrency and fiat currency
Mastercard is testing the widely used stablecoin USDC on its platform. Additionally, Mastercard has announced a tie-up with the payment technology giant Circle, which is also the company that helms the widely-used stablecoin USDC.
The trial has been designed to enable crypto to fiat currency conversions. It will be a significant relief for cryptocurrency owners as they can spend their cryptocurrency assets more easily as card issuers and crypto businesses settle payments to Mastercard.
USDC role in payments and commerce on the internet is growing
Circle co-founder and CEO Jeremy Allaire said the partnership between Circle and Mastercard would again reaffirm the belief that USDC’s role in payments and commerce on the internet is growing. It also fulfils its role as a vital bridge between digital currency payment systems and large, established payment networks.
The USDC has grown phenomenally since its inception in 2018. The Ethereum based stablecoin has surged to $25 billion in circulation and has made possible over $785,000,000,000 in on-chain transaction volume.
Circle USDC will serve as a bridge.
Circle USDC will serve as a bridge between the Cryptocurrency in consumers’ digital wallets and the fiat currency paid to merchants. USDC almost always trades for $1 because the issuer is promising to redeem it one for one with Dollars at any time.
It would seem like an extra step: swapping a cryptocurrency for a stablecoin and then exchanging the stable coin for fiat currency like the dollar. However, it will be much quicker and easier than going directly from Cryptocurrency to fiat currency. Some cryptos cannot be easily traded on an exchange for dollars but can be for USDC.
Crypto to fiat currency conversion with as little friction as possible
Mastercard executive vice president of digital asset and blockchain products and partnerships Raj Dhamodharan feels that the collaboration between Circle and Mastercard will make it much easier to convert cryptocurrencies like Bitcoin and Ethereum into fiat currencies with as little friction as possible.
The partnership between Circle and Mastercard will also help to create new opportunities and business in digital currencies. The cryptocurrency market is maturing more and more with each passing day, and together Circle and Mastercard will give more choices for people.
Raj Dhamodharan added that today not all cryptocurrency companies have the essential infrastructure to convert Cryptocurrency to traditional fiat currency, and we’re making it more accessible. For example, Mastercard had, five months earlier, said that it planned to bring select stablecoins into its network. The latest partnership is being seen as a step toward that eventual goal.
Mastercard is not the first collaboration with Circle for USDC. For example, in December 2020, Visa had announced a partnership with Circle to utilize USDC as a settlement for payments.
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