Mastercard Acquires a Crypto Analytics Firm

Key takeaways:

In September, Mastercard purchased crypto-analytics business CipherTrace, a move that the payments giant’s CEO described as a “massive service opportunity” during a third-quarter earnings call on Thursday.
Mastercard and Bakkt have teamed up to provide innovative crypto and loyalty solutions.

Mastercard Acquires A Crypto Analytics Firm

According to CNBC on October 26th, Mastercard said that all of the hundreds of banks and millions of merchants on its payments network would soon be able to integrate bitcoin into their goods. This includes bitcoin wallets, credit and debit cards that earn crypto rewards and allow users to spend digital assets, and loyalty programmes that will enable users to convert airline or hotel points into bitcoin.

Mastercard purchased the crypto analytics business CipherTrace in September, describing the deal as a “massive services opportunity” during the company’s third-quarter earnings call on Thursday.

When asked about Mastercard’s crypto and digital asset strategy, CEO Michael Miebach mentioned numerous things, including the company’s preparations for central bank digital currencies and the acquisition of CipherTrace.

On the latter point, CEP Miebach said:

“Now, let me talk about CipherTrace for a moment because this space is exciting in so many ways. Questions on data privacy and question authentication. We just touched on that in the context of Europe and strong customer authentication. You have to expect the Europeans to say that strong customer authentication will play a role in crypto transactions as well, which is where we always lead with security and trust. I mean, that is synonymous with the name of MasterCard when it comes to payments, that we have to do the same role.”

Miebach reaffirmed previous views on the CBDC, stating that significant European and North American countries have yet to proceed beyond research and development. However, if a digital dollar or euro becomes a reality, Mastercard is positioned itself to be a service provider — as well as an income source.

“So it’s massive services opportunity,” Miebach commented. “CipherTrace, 900 cryptocurrencies. What does CipherTrace do? They drive compliance and AML checks into crypto transactions. We can’t run fast enough right now to get into the space because a lot of other people are deep into crypto, and these questions are not resolved.”

Following the partnership with Google, Bakkt also announced a partnership with MasterCard earlier this week to improve access to crypto buying and investment options. Users of Mastercard may now allow customers to buy, sell, and hold cryptocurrency and offer unique crypto-centric loyalty programmes and ease the issuing of branded crypto debit and credit cards.

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