The deal is designed to help Mastercard offer more choice in “how people and businesses exchange value by enabling interoperability across fiat and digital currencies,” the company said in a Monday (Aug. 3) news release.
“Digital currencies — particularly stablecoins — are increasingly addressing real-world needs in areas like cross-border B2B payments, remittances, payouts, settlement and treasury flows,” said Jorn Lambert, chief product officer at Mastercard. “In a multi-money world where fiat, stablecoins and tokenized deposits and other forms of value coexist, the next payments paradigm will be defined by how effectively each rail, network or form of money connects and works together. By combining Mastercard’s global network with BVNK’s on-chain infrastructure and stablecoin-native technology, we can deliver a more efficient, trusted and seamless payment experience.”
Mastercard first announced the $1.8 billion acquisition of BVNK in March. Per the release, the company provides infrastructure supporting fiat and on-chain payments, letting people, businesses and machines “hold, move, manage and convert value across fiat and digital currencies” within a framework of security, compliance and interoperability.”
Mastercard said combining BVNK’s technology and industry expertise with its capabilities will help financial institutions, FinTechs and enterprises improve on use cases powered by stablecoins and tokenized assets, such as cross-border B2B payments and treasury flows.
Writing about the acquisition in March, PYMNTS contended that while stablecoins might represent the next evolution in payments technology, the deal suggests that technology isn’t enough on its own.
“Without incentives, governance and trust, even the most efficient systems struggle to scale,” that report said. “And the barriers to stablecoin adoption aren’t technical. They’re economic, institutional and behavioral.”
The BVNK deal highlights how incumbents like Mastercard are trying to close those gaps by weaving stablecoins into the systems where they can best offer value “while ensuring their own centrality to future transaction flows, regardless of the underlying rails,” the report added.
It also gives Mastercard a way to bring stablecoins in the governance, trust and incentive systems already found in global payments.
Research from PYMNTS Intelligence shows that these missing governance layers are among the chief reasons corporate executives have yet to experiment with, let alone seriously integrate, blockchain tools.
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