Middleman Moves Mastercard chief executive Michael Miebach wants to use blockchain tech selectively for things like speeding up cross-border-payments. "It's not an either-or," he says.
"THERE WILL ALWAYS BE NEW PAYMENT TECHNOLOGY," says Michael Miebach, chief executive of Mastercard, the world's second-largest credit card company. "First there were cards using ISO 8583 [ISO numbers refer to international standards] messaging technology, which is 50 years old, then real-time payments became real with ISO 20022. And then came blockchain, and we said okay, what would that solve? There's a whole set of real-life problems out there that blockchain can solve."
In late January, the 55-year-old Miebach told analysts and shareholders that his company had surpassed 2 billion "tokenized" transactions per month, up 38% in a year, and that Mastercard was enabling digital payments in 110 countries. The big benefit? Less fraud.
Today, tokenization at Mastercard means replacing the 16-digit number on your plastic credit card with a supersecure unique digital record for every transaction, without ever leaving behind your identity in the form of a credit card number. It's not yet on a blockchain, but Mastercard is currently working with banks and merchants to tokenize a variety of assets, including deposits, which will be tracked on multiple public and private blockchains.
"You can tokenize anything," Miebach says. "I think we're going to have a world where everything will be tokenized and will be passed around in a safe fashion."
[https://cdn.magzter.com/1369322608/1676974581/articles/5ZhZRzM2j1677075693929/0746197096.jpg]
Opportunity Headknocker Derivatives trading and tokenizing bonds are just two of the crypto profit centers CEO David Solomon envisions for Goldman Sachs.
Mastercard is one of 22 financial companies that made Forbes' 2023 Blockchain 50 list of billion-dollar companies putting distributed-ledger technology to real use. Mastercard is also a prototypical corporate middleman. It raked in $22 billion in revenue and $10 billion in profit last year from the fees it charges merchants to, essentially, help customers spend their own money. In other words, Mastercard is exactly the type of company that crypto zealots love to hate.
But it is trusted by millions of merchants worldwide. And in the wake of Web3's never-ending barrage of scandals, scams and swindles, trust is exactly what the sector needs. Smelling opportunity, blue chip financial giants, including BlackRock, JPMorgan and Fidelity, have become some of the biggest champions of the new technology.
"What do you need for blockchain to scale?" asks Miebach, whose company launched 35 new crypto-friendly debit and credit cards last year. "It scaled for traditional payments because people trust experience, they trust data privacy and they trust they won't be taken for a ride."
Other "TradFi" CEOs are right alongside Miebach, beating the crypto drum. In December David Solomon, the CEO of Goldman Sachs, penned an opinion piece in the Wall Street Journal headlined "Blockchain Is Much More Than Crypto," in which the boss of Wall Street's most iconic firm cautioned against dismissing the technology in the wake of the Sam Bankman-Fried/FTX fiasco. The crux of his argument? "Under the guidance of a regulated financial institution like ours blockchain innovations can flourish."
Big banks like Goldman have largely avoided directly investing in cryptocurrencies but have quietly been working with their underlying technology. "We see huge commercial opportunities," says Mathew McDermott, head of digital assets at Goldman Sachs. In November, his 70-person team underwrote a €100 million bond offering for the European Investment Bank in conjunction with Santander and Société Générale. The process took just 60 seconds. Typically, a bond sale like this takes about five days.
"[There are] people who would like to continue to trade the crypto market, and we're keen to [help] through derivatives or options," McDermott adds. One strong piece of evidence pointing to the value of trust: In 2022, big unregulated crypto exchanges like Binance, Huobi and OKX saw volume fall by more than 25% through September, while CME, Chicago's highly regulated futures trading exchange, saw increases of 62% in bitcoin futures and 80% in ethereum futures over the same period.
[https://cdn.magzter.com/1369322608/1676974581/articles/5ZhZRzM2j1677075693929/iaCt__roh1677075877945.jpg]
Likewise, Fidelity is seizing upon the crisis in crypto confidence by flooding Instagram feeds with advertisements for its soon-to-launch Fidelity Crypto. "Get on the early-access list to trade bitcoin and ethereum," reads one promotion. "Start with the names you know, invest with a name you can trust."
The nation's oldest bank, 238-year-old BNY Mellon, already offers digital asset custody for U.S. asset managers and provides back-office services to 19 Canadian crypto ETFs and mutual funds. Like David Solomon at Goldman, Mellon's chief executive, Robin Vince, took to the newspapers to announce the seriousness of his bank's crypto plans, writing a December article in the Financial Times entitled "Time for a Reset of the Crypto Opportunity."
JPMorgan's 66-year-old CEO, Jamie Dimon, called cryptocurrencies "decentralized Ponzi schemes" last fall, but his bankers have been hard at work using blockchain tech to execute $550 billion in repurchase agreements since 2020.
"The next ge...
"THERE WILL ALWAYS BE NEW PAYMENT TECHNOLOGY," says Michael Miebach, chief executive of Mastercard, the world's second-largest credit card company. "First there were cards using ISO 8583 [ISO numbers refer to international standards] messaging technology, which is 50 years old, then real-time payments became real with ISO 20022. And then came blockchain, and we said okay, what would that solve? There's a whole set of real-life problems out there that blockchain can solve."
In late January, the 55-year-old Miebach told analysts and shareholders that his company had surpassed 2 billion "tokenized" transactions per month, up 38% in a year, and that Mastercard was enabling digital payments in 110 countries. The big benefit? Less fraud.
Today, tokenization at Mastercard means replacing the 16-digit number on your plastic credit card with a supersecure unique digital record for every transaction, without ever leaving behind your identity in the form of a credit card number. It's not yet on a blockchain, but Mastercard is currently working with banks and merchants to tokenize a variety of assets, including deposits, which will be tracked on multiple public and private blockchains.
"You can tokenize anything," Miebach says. "I think we're going to have a world where everything will be tokenized and will be passed around in a safe fashion."
[https://cdn.magzter.com/1369322608/1676974581/articles/5ZhZRzM2j1677075693929/0746197096.jpg]
Opportunity Headknocker Derivatives trading and tokenizing bonds are just two of the crypto profit centers CEO David Solomon envisions for Goldman Sachs.
Mastercard is one of 22 financial companies that made Forbes' 2023 Blockchain 50 list of billion-dollar companies putting distributed-ledger technology to real use. Mastercard is also a prototypical corporate middleman. It raked in $22 billion in revenue and $10 billion in profit last year from the fees it charges merchants to, essentially, help customers spend their own money. In other words, Mastercard is exactly the type of company that crypto zealots love to hate.
But it is trusted by millions of merchants worldwide. And in the wake of Web3's never-ending barrage of scandals, scams and swindles, trust is exactly what the sector needs. Smelling opportunity, blue chip financial giants, including BlackRock, JPMorgan and Fidelity, have become some of the biggest champions of the new technology.
"What do you need for blockchain to scale?" asks Miebach, whose company launched 35 new crypto-friendly debit and credit cards last year. "It scaled for traditional payments because people trust experience, they trust data privacy and they trust they won't be taken for a ride."
Other "TradFi" CEOs are right alongside Miebach, beating the crypto drum. In December David Solomon, the CEO of Goldman Sachs, penned an opinion piece in the Wall Street Journal headlined "Blockchain Is Much More Than Crypto," in which the boss of Wall Street's most iconic firm cautioned against dismissing the technology in the wake of the Sam Bankman-Fried/FTX fiasco. The crux of his argument? "Under the guidance of a regulated financial institution like ours blockchain innovations can flourish."
Big banks like Goldman have largely avoided directly investing in cryptocurrencies but have quietly been working with their underlying technology. "We see huge commercial opportunities," says Mathew McDermott, head of digital assets at Goldman Sachs. In November, his 70-person team underwrote a €100 million bond offering for the European Investment Bank in conjunction with Santander and Société Générale. The process took just 60 seconds. Typically, a bond sale like this takes about five days.
"[There are] people who would like to continue to trade the crypto market, and we're keen to [help] through derivatives or options," McDermott adds. One strong piece of evidence pointing to the value of trust: In 2022, big unregulated crypto exchanges like Binance, Huobi and OKX saw volume fall by more than 25% through September, while CME, Chicago's highly regulated futures trading exchange, saw increases of 62% in bitcoin futures and 80% in ethereum futures over the same period.
[https://cdn.magzter.com/1369322608/1676974581/articles/5ZhZRzM2j1677075693929/iaCt__roh1677075877945.jpg]
Likewise, Fidelity is seizing upon the crisis in crypto confidence by flooding Instagram feeds with advertisements for its soon-to-launch Fidelity Crypto. "Get on the early-access list to trade bitcoin and ethereum," reads one promotion. "Start with the names you know, invest with a name you can trust."
The nation's oldest bank, 238-year-old BNY Mellon, already offers digital asset custody for U.S. asset managers and provides back-office services to 19 Canadian crypto ETFs and mutual funds. Like David Solomon at Goldman, Mellon's chief executive, Robin Vince, took to the newspapers to announce the seriousness of his bank's crypto plans, writing a December article in the Financial Times entitled "Time for a Reset of the Crypto Opportunity."
JPMorgan's 66-year-old CEO, Jamie Dimon, called cryptocurrencies "decentralized Ponzi schemes" last fall, but his bankers have been hard at work using blockchain tech to execute $550 billion in repurchase agreements since 2020.
"The next ge...
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Forbes (Digital) - 1 Issue, February - March 2023