Circle and Paxos to Use Fiat-Backed Stablecoins to Settle Cryptocurrency Payments on the Mastercard Network
Mastercard announced yesterday plans to expand its payment card offering for cryptocurrency exchanges and digital wallet providers. The payment giant will partner with Paxos Trust Company, a blockchain-focused technology firm, Evolve Bank & Trust, a technology-driven online banking provider, and Circle, the issuer of the USDC stablecoin.
Mastercard and its partners aim to simplify the conversion of cryptocurrencies into fiat currency. Today, crypto payments on the Mastercard network require settlement in fiat, and that conversion can create operational challenges for cryptocurrency companies launching card programs that enable crypto spending.
With support from Evolve, Paxos and Circle, Mastercard will bring certain stablecoins onto its network to advance digital asset payments. This approach addresses settlement issues while providing security and regulatory compliance.
Dante Disparte, Head of Global Policy and Strategy at Circle, said: “The collaboration between Circle and Mastercard demonstrates that dollar-denominated digital currencies like USDC play a central role in making payments more efficient and can enable new economic activity for businesses around the world.”
Using their platforms, Circle and Paxos will employ fiat-backed stablecoins to facilitate the conversion of cryptocurrencies into fiat. This will make crypto payments easier to process for banks and crypto partners.
Charles Cascarilla, CEO and co-founder of Paxos, explained: “Paxos is building the underlying technology that will pave the way for an open digital economy. Our stablecoins are trustworthy, regulated and fully backed by U.S. dollars at all times. We can enable instant settlement of transactions, 24/7/365. By partnering with Mastercard, we will bring the benefits of crypto and blockchain into the daily lives of consumers worldwide.”
The initiative could attract multiple new partners. Mastercard is reportedly in discussions with Apto Payments, Galileo Financial Technologies and i2c Inc. to support program processing and management. Mastercard may also offer real-time crypto wallet technology to providers such as BitPay and Uphold, and issue cards through Metropolitan Commercial Bank and Evolve Bank & Trust.
Stephen Pair, CEO and co-founder of BitPay, commented: “BitPay believes the future of payments runs on blockchain technology, as it transforms how consumers send, receive, and store money across the globe. Working with Mastercard’s pilot to convert digital assets into dollars for everyday spending will accelerate consumer adoption of cryptocurrencies as a means to transact.”
By integrating fiat-backed stablecoins into its network, Mastercard and its partners aim to reduce friction in crypto-to-fiat settlement, improve compliance and security, and create a smoother experience for consumers and businesses using crypto for payments. The move represents another step toward mainstream acceptance of digital assets in everyday commerce, while relying on regulated, fully reserved stablecoins to bridge the gap between crypto networks and established payment rails.