In the payments industry, trust is the strongest currency

December 1, 2022 | By Walter Pimenta
It is becoming increasingly clear that security and regulation are key to ensuring interoperability between digital currencies and fiat money.

Although cryptocurrencies are gaining ground in the region as a means of payment, it is imperative to address the issues of regulation and transparency. The most recent crash of the FTX exchange put trust in check, a value as relevant as any of the other reasons listed in favor of the adoption of cryptocurrencies, such as speed, efficiency, and the possibility of making financial inclusion a reality for those who are still outside the system.

Mastercard's latest whitepaper, Creating new paths for sustainable and inclusive economic growth, analyzes the adoption of digital assets in Latin America, a region that some experts consider to be at the center of the crypto revolution. As a few examples, the paper highlights specific data to support this claim: cryptocurrency transactions in Latin America reached $353.8 billion between June 2020 and June 2021, which corresponds to 9% of all transactions globally; El Salvador adopted Bitcoin as legal tender, and the Bahamas became the first country in the world to issue a CBDC.

Over 7 out of 10 Latin Americans turn to cryptocurrencies as a means of investment, says the study. Although its volatility can be extrapolated to the fluctuations of other currencies in the region -which could explain why Latin Americans are more tolerant of the ups and downs of digital currencies, says the study-, the truth is that Latin Americans prefer to operate with crypto through a debit, credit or prepaid card: 33.8% of purchases made with crypto are made with a card. Users look for security, convenience, speed, lower commissions and an effective way to control their spending.

The paper, to be published in November 2022, states that approximately 34% of Latin Americans access crypto via digital wallets, although there is a perceived preference for the financial tools they already use and trust. The study also provides a glimpse of the consumer's predisposition to resort to reliable platforms.

 In trust we trust

The potential of digital currencies to change our payment routine is huge. And yet, we still face the challenge of building trust. As robustly as we built our established global payments infrastructure, at Mastercard we are helping to shape this industry. The goal is not only to offer more payment options but also -and above all- to ensure safety, compliance, and consumer protection, as we do for every one of our products and services.

Mastercard recently introduced a new program that enables financial institutions to offer their customers secure cryptocurrency trading capabilities and services - Mastercard Crypto Source™. In partnership with regulated and licensed cryptocurrency custody providers, Mastercard's financial institution partners will have access to a comprehensive suite of buy, hold and sell services for select crypto assets, augmented with proven identity, cybersecurity, and advisory services. This program is complemented by Mastercard Crypto Secure™, which brings additional security to the crypto ecosystem and supports card issuers.

We seek to support digital currency transactions in the same way we support more traditional means of payment. Only in this way can we ensure interoperability between crypto and fiat money, and gain the trust of consumers and businesses in a financial system that is strengthened by the active participation of the most experienced players.

Media Contacts

Andrea Denadai, Mastercard