Mastercard and Paxos have a history of successful partnerships, so when executives from both companies recently teamed up for an episode of Breaking Banks, the #1 global fintech radio show and podcast hosted by Brett King, industry experts were listening.
- Taking the long-view when building infrastructure and why partnering makes sense
- Why regulation is critical and helps drive towards stronger, globally connected use cases
- What the all-in-one digital wallet could do for everyday finance
Jonathan Anastasia, Mastercard’s Executive Vice President of Crypto & Security Innovation, and Michael Coscetta, Paxos’ Head of Revenue, joined Brett to share insights, beginning with commentary on the recent PayPal stablecoin milestone, the evolution of Mastercard’s partnership with Paxos – and their expectations for the future.
Taking the long-view when building infrastructure and why partnering makes sense
Jonathan’s perspective on why Mastercard chose Paxos:
“We looked at a lot of different things, starting back in 2016. We had a Mastercard proprietary blockchain and were working on developing applications to see what that could be, but we asked ourselves, ‘Do we want to build this custody capability, the infrastructure capability ourselves?…Infrastructure is hard.’ When it came to laying the card rails and building out real-time payment infrastructure with partners – it’s hard. What we did say was, ‘We need to look for a native player in this space with that deep expertise to bring the companies together on that journey.’”
Why regulation is critical and helps drive towards stronger, globally connected use cases
“[Paxos is] …the safest, and definitely the most experienced stablecoin issuer in the space. Protecting customer assets has been core to the mission…and I think that really differentiates our stablecoin products from many others.”
“There are 27,000 financial institutions in the Mastercard network, a hundred million merchants, and three billion cards in circulation. I would love to convert every single one of those players to the blockchain crypto ecosystem because then we’re facilitating what the future opportunities are like. Then you’re creating a globally interconnected network on-chain with the ability to engage in different solutions, whether it’s stablecoins, Bitcoin, or whatever new system of funding it is in five years that somebody else creates – but that ability to interact and engage in that way, it’s leading with the forward edge to say, this is where the future is going to take us.”
What the all-in-one digital wallet could do for everyday finance
“It’s the idea that whether you have a digital wallet, whether you’re using an IOT device, whether it’s still based on a card or a simple chip, or whatever the form factor is…if you see the Mastercard brand, you know that you can trust that whatever interaction you’re about to have will be safe, will be secure and will work, no matter where you are in the world…So in a future state, when we’re talking about a wallet environment, whatever it may be – you simply have your checking account, your debit card, your crypto account, your loyalty points, your Mario Brothers stamps that you got from a game, your Xbox tokens – and all of those assets are able to simply operate, be exchanged, and facilitate a flow of funds. Because at the end of the day, the consumer doesn’t go to the local coffee shop thinking, all right, where am I pulling this money from? They want to be able to pay – they want to have that cognitive offload to simply engage.”
“Banks and brokerages are not only seeing users leave, but the deposits leave even if they’re existing users – and what do all companies want to know? Am I serving my existing customer? Am I able to attract new customers? The reason Interactive Brokers, Mercado Libre, Nubank and PayPal all work with us is because they all want to be able to serve their customers.”
“It’s going to take us time to get there, but what we’ve done strategically over a period of time is we laid the pipes under the Atlantic ocean, 50-plus years ago, so we have the card network. From the core, then we started to engage in real-time payments and further into the account-to-account payment side now into on-chain activity. And the idea starts to come into being, with this overlapping lattice framework that connects everything without any seams to it – it all [just] simply works.”