The launch of a credit card offering cryptocurrency rewards from Mastercard is just one of many recent synergies between traditional finance and cryptocurrency. This collaboration is helping to propel cryptocurrency payments into the mainstream.
The battle for cryptocurrency adoption has long been based on the idea that these currencies should become useful in day to day transactions. Since people can easily pay with cryptocurrency just like fiat currency, they are more likely to interact and understand what kind of coins they are.
However, some in the crypto community believe that this relationship with traditional finance does not speak to the inherent mission of cryptocurrencies and transparent and decentralized blockchain technology.
While this may be a challenge, the collaboration has provided more use cases for cryptocurrencies so far than ever before.
Partnership ahead for crypto
For years, cryptocurrencies have struggled to be adopted by traditional financial institutions. The big players considered this fast-growing financial sector too risky and volatile to invest their weight in it.
As a result, the cryptocurrency and blockchain community has remained small as a niche interest rather than a viable alternative to fiat currencies.
The recent Bitcoin Managed Bull (BTC) has brought about a shift in the thinking of traditional financial institutions. Several companies, especially in the payments industry, have spoken out in favor of cryptocurrency. They expanded their cryptocurrency payment options and talked about future developments that will take them even further.
The latest announcement came from Mastercard. He launched the very first cryptocurrency reward card with the Gemini cryptocurrency exchange. Card users can earn up to 3% in Bitcoin or other cryptocurrencies on their purchases.
This collaboration between the two main players in their respective fields is a step forward for both sectors. Sheraz Ahmed, Managing Partner of STORM Partners, explains:
“The partnership with traditional payment systems is further driving the adoption of cryptocurrencies and changing the future of payments.”
“The launch of the Gemini and MasterCard cryptocurrency credit card will further narrow the gap between cryptocurrency and conventional payment networks,” he says.
More features means more use cases
Mastercard is just one of many traditional financial players involved in cryptocurrencies. Opponent Visa announced in March that it would begin settling U.S. dollar (USDC) coin transactions on Ethereum (ETH).
In addition to the fact that these promotions benefit those who already own cryptocurrencies, there are more reasons for others to join them and start using different coins.
“Last year, PayPal announced the integration of cryptocurrency into one of the top news in the industry. This helped increase reach as millions of active users and traders were able to buy, sell, hold and shop using cryptocurrency, ”says Ahmed.
While many do not understand how cryptocurrencies work, millions of people use PayPal for their daily transactions. This type of integration can help limit the ambivalence experienced by those who view cryptocurrencies as a confusing entity.
“The decision and its corresponding impact show the impact of traditional payment systems on the adoption of traditional cryptocurrency,” commented Ahmed.
More and more businesses are accepting cryptocurrency payments
While payment networks are making it easier to pay with crypto across the board, the growing acceptance of crypto by businesses is helping as well. In 2021, big names announced the adoption of cryptocurrency as a means of paying for their products.
Elon Musk made a splash when he announced that Tesla would start accepting bitcoin as a form of payment. Users could simply click “Pay with Bitcoin.”
More recently, the WeWork collaboration announced that it will begin accepting cryptocurrency payments through BitPay.
What’s interesting about these two companies and some others who have made these claims is that they say they will keep these payments in cryptocurrency in their ledgers.
This provides additional support as they don’t just allow cryptocurrency to be used as a transaction mechanism before converting to fiat. This type of guarantee for cryptocurrencies has become more prominent during the recent increase in support.
Long road to widespread adoption
It is difficult to determine exactly how long it will take for cryptocurrencies to officially enter the mainstream. While institutional participation is a great incentive, there are several factors that need to be considered before people can pay rent or even taxes with cryptocurrencies.
However, the question is no longer whether this will happen, but when it will happen. As PayPal CEO Dan Shulman said, “Digital currencies will go mainstream. This is snow. “
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