Bakkt mastercard
Image: Christopher T. Fong/Protocol

Can Mastercard and Bakkt make crypto payments mainstream?

Protocol Fintech

Hello and welcome to Protocol | Fintech! This Tuesday: Mastercard's crypto card moves; the SEC, IEX and Citadel battle over high-speed trading; and a different kind of bitcoin ETF.

The crypto cards are coming

One of the biggest questions about cryptocurrency is whether people will actually pay for anything with these digital assets. Mastercard's new crypto card product with Bakkt will bring that question to the fore by making it easier for big banks and other financial institutions in its network to issue cryptocurrency credit and debit cards.

Mastercard hopes to bring some much-needed scale to the world of crypto payments. Payments volume using crypto is still tiny compared to card networks like Visa or Mastercard, but crypto advocates have long envisioned crypto payment networks that don't rely on central companies like the card networks. The partnership seems to address the former while trampling the latter by making a much bigger market for crypto payments on Mastercard's rails.

  • Bakkt would hold cryptocurrency for users in a wallet and convert it to currency that a merchant wants, and then send it via Mastercard's network.
  • That means consumers could make payments in bitcoin or earn rewards in bitcoin. It also means that merchants can more easily accept crypto payments.

Others see crypto cards as the future too, with a number of crypto companies also betting on their potential.

  • BlockFi said it has more than 50,000 users of its BlockFi Rewards Visa credit card, which offers crypto rewards (in every state except New York, where it is not available). The average user is on track to spend an average of $30,000 per year, which is much higher than a traditional credit card, BlockFi said. The company said it has given out 120 bitcoin in rewards so far.
  • Coinbase offers a Visa debit card that lets users spend any crypto asset they hold on Coinbase and earn rewards of up to 4% back. SoFi, Gemini, Venmo and Brex also offer crypto card options.

But are consumers ready to pay with crypto? There are still unanswered questions about whether it makes all that much sense.

  • The wild volatility of crypto assets such as bitcoin makes using them for payments tricky because of the fluctuation in value. Stablecoins may eventually offer some respite from that, but they have some of their own questions. The largest stablecoin, Tether, has been scrutinized over whether it is truly backed one-for-one by liquid assets — as it has claimed. If it isn't, it could collapse if there is a "run on the bank" or other market instability. And U.S. regulators are set to release a report that could regulate stablecoins.
  • There are also tax implications. For example, people using crypto for payments could be required to pay taxes on the cryptocurrency that they use for payments if that crypto had gone up in value.
  • But paying with a crypto card is at least theoretically easier than paying direct with crypto from a crypto wallet.

Either way, this could draw more consumer and merchant interest. Just like bitcoin ETFs, crypto credit and debit cards make crypto accessible.

  • The Mastercard deal would enable merchants to more easily integrate crypto offerings, even for those that have no experience with crypto. That's because Bakkt is essentially converting all crypto to fiat for the merchants.
  • And even people who wouldn't want to buy crypto could potentially earn crypto rewards for using one of the Mastercard cards. So ultimately, people might not end up paying for things in crypto, but could still see some of the upsides of the currencies.

— Tomio Geron


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From Protocol | Fintech

Who gets to trade fastest? A lawsuit between Citadel, IEX and the SEC will test who controls the stock market. The arguments over IEX's D-Limit order type speak to the larger issue of who controls the U.S. capital market structure and who benefits from the ultra-fast trading that dominates financial markets.

ProShares launched its bitcoin futures ETF but Tad Park of Volt Equity is taking a different approach. His bitcoin ETF invests in companies that make most of their money from bitcoin and crypto.


"The regulatory crackdown is coming to an end, probably over the next few months, and the valuations of Chinese stocks are very inexpensive and attractive, especially for tech stocks." Tom Masi, a portfolio manager at GW&K Investment Management, thinks there's an opportunity if China's tech crackdown is coming to an end.

"Trying to regulate DeFi is a bit like trying to parent a super-powered 14-year-old who can fly, teleport and turn invisible at will." CoinDesk columnist David Z. Morris thinks keeping DeFi in check will be …. challenging.

"The government currencies are so unreliable. I've started to question now whether or not cryptocurrency could actually become the reserve currency of the world as more and more people lose confidence in government." Sen. Rand Paul takes a view that will make most lawmakers pretty uncomfortable.

3 questions for Mike Haney, head of digital core at Technisys

What fintech trend are you most excited about?

Open banking and embedded finance are related industry trends that provide customers control over their financial data and deliver financial services at the true point of need. Fintechs are fueling these trends by deploying modern APIs [and] connecting financial institutions, data providers and non-financial brands with customer devices. Customer demand for integrated experiences is increasing, and fintechs are creating the ecosystems to fulfill this demand.

What fintech trend is most troubling for you?

Retail, or direct-to-consumer, central bank digital currencies (CBDC) have several potential benefits, such as reducing the number of unbanked citizens, easing government monetary and fiscal policy, simplifying the payments infrastructure, lowering financial crime and eliminating bank liquidity risk. However, retail CBDCs may erode consumer privacy, lower customer service quality and introduce a single point of failure — namely, the central bank's non-distributed digital ledger. The role of banks will shift away from transaction processing to savings, investments and related advisory services. The cost of funds for lending may also increase as the banks' deposit balances decrease.

What was your first fintech or tech job?

After graduating from MIT with a degree in electrical engineering and computer science, I took a job with UBS in Zurich to help modernize their Swiss Private Banking & Asset Management business. As one of eight MIT graduates, we helped to redefine their operating model and technology architecture. As part of this initiative, I also built the new Order Management System, a new Portfolio Management System module, based on 4GL programming languages and the client-server designs.

Need to know

Marqeta formed a partnership with Uber Freight and Branch. The payments technology company is working with the logistics company and the workforce payments software company to speed up payments to trucking companies.

Kakao went public. The South Korea-based online payment service company, which is backed by Jack Ma's Ant Group, raised $1.3 billion in its IPO.

The CEO of Terraform Labs sued the SEC. Do Kwon, a resident and citizen of South Korea, was handed two subpoenas while he was at a New York crypto conference last month. He's suing the SEC to squash them.

Making moves

Dara Treseder is joining Robinhood's board. Treseder is senior vice president and head of global marketing and communications at Peloton.

Eric Halperin has reportedly been tapped to head CFPB enforcement. He's a former Obama-era official who led Justice Department fair lending enforcement.

Revolut is hunting for a new U.S. CEO.The British neobank's current U.S. CEO, Ronald Oliveira, is reportedly leaving as the company ramps up efforts stateside.

Alliance Data Systems is partnering with Sezzle. The marketing and payments software company is working with the "buy now, pay later" company to offer an installment pay-over-time loan product through Alliance Data Systems' Bread payments product.

Deal flow

Pismo raised $108 million. The Brazilian banking and payments software company's series B round was led by SoftBank, Amazon and Accel.

Billie raised $100 million. The Berlin-based "buy now, pay later" company's series C round was led by Dawn Capital.

Button raised $2 million. The fintech mortgage lender's seed funding was led by Hildene Capital Management.


It's that adaptability that keeps clients loyal to Apex, and helps them grow in the highly competitive and turbulent world of democratized finance. As of June 2021, 11 million of Apex's customers were aged 18-40 — but as others start to see the potential in this new and growing space, they're starting to jump in.

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Data point

$795,000: The amount Coinbase spent on lobbying in Washington, D.C. in the third quarter alone.

Thanks for reading — see you Friday!

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