David Edwards
A major milestone in its attempts to modernize the global payments ecosystem has been reached with the successful tokenization of 30% of its transactions in 2024, according to multinational payments giant Mastercard. The business also recognized the disruptive potential of cryptocurrencies and stablecoins, indicating a change in the financial services industry’s competitive environment.
The Drive for Payment Innovation by Mastercard
Mastercard described its developments in risk management techniques, digital asset accessibility, and blockchain-based business models in a recent filing with the U.S. Securities and Exchange Commission (SEC).
“Through a principled approach—including prudent risk management and continuous monitoring of digital asset partners—we are committed to supporting blockchain ecosystems and digital currencies,” the company stated.
Through partnerships with a wide range of cryptocurrency companies, Mastercard has made it possible for customers to use its cards to buy digital goods and spend their cryptocurrency balances at participating retailers.
The business reported $28.2 billion in net revenue for 2024, a 12% rise from the year before, reflecting its strategic growth.
Emergence of Stablecoins as a Threat to Competition
Stablecoins and cryptocurrencies were officially recognized by Mastercard as competitors in the payments industry due to their efficiency, accessibility, and immutability. The business pointed out that more regulatory clarity would hasten the uptake of digital currencies and put conventional payment methods in jeopardy.
To strengthen the supremacy of the US dollar, lawmakers in the US are proposing a stablecoin legal framework. A draft measure submitted by Representatives French Hill and Bryan Steil seeks to provide precise rules for stablecoin regulation.
Transaction Volumes for Stablecoin Exceed Mastercard and Visa
According to data from cryptocurrency exchange CEX.io, stablecoin transactions totaled $27.6 trillion in 2024, surpassing the combined transaction volume of both Visa and Mastercard. Illia Otychenko, a principal analyst at CEX.io, claims that trading bots, which contribute significantly to this activity, improve market efficiency instead of boosting volume.
Stablecoins and blockchain payments are set to transform the financial industry with growing adoption and regulatory attention, forcing established payment companies like Mastercard to adjust to the changing digital environment.
