Global payments giant Mastercard has partnered with Australian stablecoin wallet provider Stables to allow retail customers in the Asia-Pacific (APAC) region to make payments in USDC stablecoin at merchants supported by Mastercard.
Stables, formerly known as Tiiik, is a Sydney-based digital wallet that allows users to spend, send and earn in stablecoins.
Mastercard Partner With Stables To Facilitate USDC Payments In APAC Region
The partnership will see Mastercard integrate its settlement network into the Stables’ wallet to facilitate transactions. Stables will collaborate with the digital payment card issuing platform Marqueta to release a Mastercard-branded card.
The card will allow users to convert USDC into fiat in real time and spend the cash in any location that accepts Mastercard online or in-store in the APAC region. Stables users can get their hands on the Mastercard payment card on the mobile app.
The wallet allows customers to deposit in other stablecoins, including Tether USD (USDT), Dai (DAI), and Binance USD (BUSD), on the Ethereum, Polygon, Arbitrum, Avalanche, BSC, and Optimism networks. All balances are then auto-converted to USDC on Polygon at no cost. Stables will deploy a proprietary settlement engine supported by the Mastercard network to process all payments in USDC.
Users can deposit fiat currencies on their Stable Wallet using bank transfer, debit, and credit cards. However, at the moment, the wallet only supports deposits and withdrawals in Australian dollars (AUD). Stables will offer support for the U.S. dollar, euro, pound, and currencies from APAC, Latin America (LATAM), and African countries as it expands services to these regions.
Kallan Hogan, Mastercard’s Australasia Head of Finance, said the company’s partnership with Stables is significant to its expansion in the Web 3.0 space. The finance head also mentioned that the wallet provider makes use of Mastercard’s cybersecurity and intelligence tools, like CipherTrace, which can detect security vulnerabilities in over 900 cryptocurrencies, and Ekata – a dynamic identity verification solution.
Stables will launch its Mastercard service in the second quarter of 2023 for customers in Australia and later expand the program to the United States, Europe, the United Kingdom, and countries in the Asia Pacific.
Testing Times For Stablecoins, But There Is Light At The End Of The Tunnel
The Stablecoin market has been facing a tough period, especially in the last couple of weeks after the collapses of three crypto-focused U.S. banks – Silicon Valley Bank, Silvergate Bank, and Signature Bank.
Circle, issuers of USDC tokens, had $3.3 billion in cash backing the stablecoin deposited in Silicon Valley Bank. The California-based bank’s insolvency and shutdown led to holders casting doubts over USDC’s future and rushing to cash out their investments. USDC, which is supposed to maintain parity with USD, debugged from its dollar value and was trading as low as $0.87 on March 12, 2023. The world’s second-largest stablecoin by market cap has since recovered its dollar peg and is currently trading at its normal rate of $1.
Similarly, Binance USD (BUSD), a stablecoin owned by the Binance crypto exchange and issued by Paxos, had troubles of its own last month. The U.S. Securities and Exchange Commission ordered Paxos to stop minting BUSD or face a lawsuit after the financial regulator alleged the token was an unregistered security.
Paxos has since terminated its partnership with Binance and stopped issuing the stablecoin. At its height, BUSD was the world’s third-largest stablecoin and the most traded cryptocurrency on Binance.
Despite the recent difficulties, Stables’ Chief Operating Officer Daniel Li said he believes that stablecoins will play an important role in forming the new financial system and will be instrumental in building the bridge between traditional and crypto finance. The COO stated that Stables will continue to work alongside its partner Circle and considers USDC a pivotal part of the ecosystem.
Earlier this month, the Reserve Bank of Australia announced it is working with private companies, including Mastercard, to develop specific use cases for the upcoming Australian digital dollar. Mastercard was assigned the task to make eAUD interoperable with other decentralized networks. The payments giant will release a wrapped eAUD, backed 1:1 by the original CBDC, to allow users to make risk-free transactions across blockchains.
Meanwhile, last week, the National Australia Bank (NAB), one of the largest banks in the country, conducted the world’s first cross-border transaction using a bank-issued stablecoin on the Ethereum blockchain. AUDN, an ERC-20 token issued and managed by NAB, was developed to help Australians make real-time, low-cost, peer-to-peer, cross-border remittances, eliminating the need for a slower and much costlier SWIFT network.