Mastercard said Tuesday it secured a contract with Coinbase, the latest in a recent spate of alliances between payment and cryptocurrency firms.
As part of the arrangement, Coinbase clients will be able to use Mastercard credit and debit cards to make transactions on the crypto exchange’s future NFT marketplace. Coinbase disclosed late last year intentions to launch the platform for minting and buying nonfungible tokens, which have grown in popularity over the past 12 months.
By partnering with Mastercard, Coinbase hopes to eliminate friction in the NFT buying process. Currently, customers must open a crypto wallet, buy digital currencies, and then spend those on NFTs in an online marketplace. Mastercard says it wants to let consumers pay for NFTs in more ways.
To help the NFT market grow, more people need to participate safely and securely. “Mastercard sees NFTs’ core technology going beyond art and collectibles into many other areas,” said Raj Dhamodharan of Mastercard.
Mastercard is one of the world’s leading credit card and payment corporations. It has recently partnered with crypto startups. This collaboration with Bakkt will allow Mastercard-affiliated banks and merchants to offer crypto-related services. It has partnered with Gemini, BitPay, and Mintable.
Visa has also been involved in crypto. It has over 60 collaborations in the space, including one with Coinbase.
Stablecoins are being tested on American Express cards and network. But, according to CEO Stephen Squeri, an Amex crypto-linked card isn’t coming “anytime soon.”
Bitcoin and other cryptocurrencies were created to bypass banks and middlemen. But as cryptocurrencies gain popularity, banks and payment processors have embraced them.
Mastercard’s “out-of-the-box thinking” in regards to crypto, according to Mizuho Securities analyst Dan Dolev. Blockchain and decentralized finance “can be a threat to the broader network ecosystem,” according to Dolev.