Mastercard team’s up with crypto company Bakkt to provide crypto services

The decision could lead to notable development in the ways average Americans earn and spend bitcoin and other cryptocurrencies. Mastercard operates one of the dominant global payments networks and Visa and has links with more than 20,000 financial institutions worldwide.

Mastercard is planning to declare that any of the thousands of banks and millions of merchants on its payments network can soon combine crypto into their products, as reported by CNBC. That involves bitcoin wallets, credit and debit cards that receive rewards in crypto and allow digital assets to be used, and loyalty programs where airline or hotel points can be turned into bitcoin.

To do so, the payments network is partnering with Bakkt, the crypto company newly produced off by Intercontinental Exchange, which will be the behind-the-scenes provider of custodial services for those who sign up, executives at the two firms told CNBC.

“We want to offer all of our partners the ability to more easily add crypto services to whatever it is they’re doing,” Sherri Haymond, Mastercard’s executive vice president of digital partnerships, said in an interview. “Our partners, be they banks, fintech or merchants can offer their customers the ability to buy, sell and hold cryptocurrency through an integration with the Baktt platform.”

The decision could lead to notable development in the ways average Americans earn and spend bitcoin and other cryptocurrencies. Mastercard operates one of the dominant global payments networks and Visa and has links with more than 20,000 financial institutions worldwide. There are 2.8 billion Mastercards in use, according to the company.

Investment in Bitcoin has continued high as the original cryptocurrency rose this year, hitting a record price above $60,000 this month. U.S. regulators have approved the fund industry to offer bitcoin ETFs for the first time this month. In contrast, big institutional investors like bond giant Pimco have said they were contemplating trading crypto.

According to Haymond, that interest has led Mastercard clients to ask the network for help in giving crypto services. That way, she said that banks could keep customers on their platforms rather than seeing dollars migrate to crypto exchanges.

Shares of Bakkt, which began trading as a public company last week, climbed more than 70% on the news. Mastercard and Bakkt were set to declare their partnership later Monday at the annual Money20/20 conference in Las Vegas.

Besides giving crypto wallets and credit cards for banks, the combination means that even merchants and restaurants can provide Bitcoin rewards instead of traditional points, according to Bakkt CEO Gavin Michael. He said that existing points can be transformed into crypto at rates set by the participating companies, giving customers the ability to earn a yield.

“We’re lowering the barriers to entry, allowing people to take something like your rewards points and trade them into crypto,” Michael said in an interview. “It’s an easy way to get going because you’re not using cash, you’re putting something that’s an idle asset sitting on your balance sheet, and we’re allowing you to put it into work.”

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