Rewritten Article
Stablecoins Take Over: Mastercard's Latest Partnership with MoonPay
Credit card giant Mastercard plans to introduce stablecoin-linked payment cards in partnership with crypto platform MoonPay, marking the company's latest foray into the digital currency sector.
The Scene: Mastercard, the global payments giant, has partnered with MoonPay, a crypto company, to enable stablecoin payments across 150 million merchants worldwide.
This partnership, built on MoonPay's acquisition of stablecoin payment firm Iron in March, will rely on Iron's infrastructure for transactions, which will be automatically converted into fiat currency.
The Appeal of Stablecoins
Stablecoins, digital assets pegged to a fiat currency like the U.S. dollar, have become popular tools in cryptocurrency trading and payments due to their price stability. But the regulatory landscape is still murky in many regions.
Last month, the U.S. Securities and Exchange Commission (SEC) issued guidance suggesting that some stablecoins aren't securities. However, the SEC left several questions unanswered, particularly about yield-bearing and algorithmic stablecoins. It also recently dropped an investigation into PayPal's stablecoin offering.
Despite the regulatory fog, card networks are bullish on stablecoin rails, betting on their usefulness in remittances, creator economies, and cross-border commerce.
Mastercard's Crypto Collaborations
Mastercard's latest announcement adds to its growing roster of crypto collaborations. In April, it partnered with crypto exchange OKX and processor Nuvei on a similar project. OKX will launch a new crypto card, while Nuvei, in partnership with stablecoin issuer Circle, will provide merchant infrastructure.
This move outshines a recent initiative by Mastercard's competitor, Visa, which announced a pilot program allowing customers in six Latin American countries to transact in stablecoins. This program, covering Argentina, Colombia, Ecuador, Mexico, Peru, and Chile, lets users pay with stablecoins from existing balances and is set to expand to Europe, Asia, and Africa.
The Regulatory Landscape
The regulatory status of stablecoins varies across jurisdictions. In the U.S., efforts are underway to establish a regulatory framework for stablecoins, with optimism for progress in 2025. The GENIUS Act and STABLE Act are among the bills advancing in Congress, proposing different regulatory approaches.
Outside the U.S., regulatory approaches differ. Some countries have been receptive to cryptocurrencies and stablecoins, while others have imposed strict regulations or bans. For instance, the European Union's Markets in Crypto-Assets (MiCA) regulation provides a framework for stablecoins but doesn't specifically address algorithmic or yield-bearing types.
Stablecoins, especially U.S. dollar- pegged ones, are becoming strategic assets facilitating international transactions and strengthening the dollar's global position. As they integrate into mainstream financial systems, regulatory frameworks will likely evolve to address the risks and benefits associated with yield-bearing and algorithmic stablecoins.
Edited by Sebastian Sinclair
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[1] Regulatory Landscape for Stablecoins: Current Challenges and Emerging Trends[2] Stablecoins: The Next Generation of Digital Money[3] U.S. Senate Fails to Pass Cryptocurrency Legislation as Lawmakers Push for Conciliatory Bill[4] Stablecoins, Remittances, and the Future of Cross-Border Payments[5] Congress Advances Bills Aimed at Regulating Stablecoins Differently
- Mastercard's partnership with MoonPay enables crypto payments using stablecoins, which are digital tokens pegged to a fiat currency, across 150 million merchants worldwide.
- Stablecoins are popular in crypto trading and payments due to their price stability, but the regulatory landscape remains unclear in many regions.
- In the U.S., the SEC has suggested that some stablecoins aren't securities, but questions about yield-bearing and algorithmic stablecoins remain unanswered.
- Card networks, like Mastercard, are bullish on stablecoin rails, seeing their potential in remittances, creator economies, and cross-border commerce.
- Regulatory approaches to stablecoins vary across jurisdictions, with different bills advancing in Congress in the U.S., while the European Union's MiCA regulation provides a framework for stablecoins, but doesn't specifically address algorithmic or yield-bearing types.
