On Monday, Mastercard said it would start offering crypto services for its customers that include:
- A cryptocurrency wallet
- Ability to earn cryptocurrency on credit card spend
- Loyalty rewards that can be converted to fiat and spent anywhere
Mastercard isn't doing this alone. To provide its crypto services, it is utilizing a firm called Bakkt. Bakkt is a digital asset platform. It supports crypto, hotel points, loyalty points, cash, and gift cards. The main advantage of Bakkt is that it allows people to see all of their digital asset holdings in one place.
Bakkt spun off from Intercontinental Exchange earlier this year. It went public via a SPAC on Oct 18, 2021. Its partners include Google, Finastra, Choice Hotels, Chipotle, Starbucks, AMEX, and JetBlue. Bakkt also partnered with Fiserv on the same day as the MasterCard deal to offer merchant-facing digital asset services. In the three days since the announcement, Bakkt's stock (ticker BKKT) shot up from $8 to a high of $37.49.
“Together with Bakkt and grounded by our principled approach to innovation, we’ll not only empower our partners to offer a dynamic mix of digital assets options, but also deliver differentiated and relevant consumer experiences,” Sherri Haymond, executive vice president of digital partnerships at Mastercard, said in the statement, as referenced by Bloomberg.
Mastercard will offer its crypto services to both credit card and debit cardholders. Mastercard's merchants will be able to accept cryptocurrency payments with the new partnership. Merchants that issue their own branded cards via Mastercard will also be able to issue [virtual] currency debit or credit cards.
Currently, the only cryptocurrency on the Bakkt platform is Bitcoin. On Oct 20th, Bitcoin hit a record high of $66,000, putting its market cap at $2.7 trillion.