Mastercard: Stablecoins need better rails to speed up payments

Mastercard warns that stablecoins may not deliver faster payments for consumers unless the infrastructure connecting them to traditional cash is improved. Matthew Driver, executive vice president of services for Asia Pacific at Mastercard, explained that the current setup often creates a bottleneck. He described this as a stablecoin sandwich, where the on-ramp into crypto is slow, the transaction in the middle is fast, and the off-ramp back into fiat currency is slow again.

Driver told CNBC that this structure prevents the technology from offering real speed advantages in everyday use. He noted that stablecoins, which peg their value to assets like the U.S. dollar, show more promise in specific remittance corridors and for less commonly traded currency pairs. For the technology to work effectively, market participants must be able to use it without friction, requiring better links between real-time payment systems and stablecoin exchanges on both ends of a transaction.

The adoption path differs by market. In Singapore, where retail payments are already efficient, Driver sees fewer opportunities for consumer transactions. Instead, he points to corporate payments as a stronger area for growth. Smart contracts could allow these corporate transactions to execute automatically when specific conditions are met.

Interest in the sector has risen following the establishment of the U.S. GENIUS Act. Mastercard is expanding its own digital asset footprint to address these infrastructure gaps. The company completed the acquisition of stablecoin infrastructure provider BVNK in August. Earlier this month, Mastercard and BVNK launched the Global Money Platform. This tool is designed to help banks, fintechs, and businesses manage payments involving both traditional currencies and stablecoins through a single application programming interface.

Driver said the company is also working to incorporate blockchain and identity data into the system. The goal is to establish the same level of trust that users currently expect from other payment networks.