Mastercard (MA, Financial) is positioning itself as a bridge between digital assets and traditional finance, despite stablecoins facing hurdles to become everyday payment tools. Chief Product Officer Jorn Lambert highlighted that while stablecoins offer advantages like speed, low cost, and programmability, they lack crucial attributes such as user experience and consumer reach.
Mastercard has been developing its strategy for years, working with stablecoin issuers like Paxos Trust Company to support the creation and redemption of USDG stablecoins. The company also backs other stablecoins like Fiserv's FIUSD, PayPal's PYUSD, and Circle's USDC, viewing stablecoin infrastructure as a long-term opportunity.
Lambert noted that 90% of stablecoin transactions are linked to cryptocurrency trading. Companies like Shopify (SHOP) and Coinbase (COIN) aim to integrate stablecoins into daily payments, but consumer acceptance and online checkout friction remain barriers. Lambert compared stablecoins to prepaid cards, lacking a clear value proposition for regular consumer-to-merchant payments.
As U.S. legislation on stablecoins progresses, financial institutions are reassessing their roles in the evolving digital asset landscape. The need for stablecoin-to-fiat exchanges remains essential, adding costs beyond the stablecoin itself. Governments and central banks are also exploring domestic innovations to avoid economic dollarization.
