Mastercard cards and a series of lines
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Mastercard wants you to trust crypto. That feels harder every day.

Protocol Fintech

Hello and welcome to Protocol | Fintech! This Tuesday: Mastercard's crypto moves, Intuit is buying Mailchimp, and California's designs on income share agreements.

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The Big Story

Mastercard needs to be where payments and capital are. It's 2021, so that means getting into crypto. The payments giant added another arrow to its digital-assets quiver with the acquisition of CipherTrace, a crypto security company.

Cryptocurrencies are becoming a bigger part of the financial system every day — despite warning signals that pop up at every turn. A fake press release about Walmart purportedly taking litecoin as payment sent the cryptocurrency gyrating Tuesday. And bitcoin remains volatile after experiencing a flash crash last week on the same day El Salvador adopted the cryptocurrency as legal tender.

Mastercard's crypto pitch is about trust. It wants customers involved in the crypto economy to have the same "peace of mind" that exists in traditional payments, the company said in its announcement of the CipherTrace deal.

  • CipherTrace provides security and fraud monitoring for banks, exchanges and other financial institutions. The startup says it has insights into more than 900 cryptocurrencies.
  • Many large financial institutions are using or testing the use of digital assets, and Mastercard can now offer CipherTrace's security services to them.
  • The Office of the Comptroller of the Currency last year said that banks can hold crypto. And crypto custody firm Anchorage has received approval to be a digital asset bank.
  • "Digital assets have the potential to reimagine commerce, from everyday acts like paying and getting paid to transforming economies, making them more inclusive and efficient," Ajay Bhalla, president of cyber and intelligence at Mastercard, said in the deal announcement. "With the rapid growth of the digital asset ecosystem comes the need to ensure it is trusted and safe. Our aim is to build upon the complementary capabilities of Mastercard and CipherTrace to do just this."

It's also about reaching the crypto generation. Mastercard has already taken steps into crypto, especially enabling the movement of money from fiat to crypto or vice versa.

  • In July, it partnered with Evolve Bank & Trust, Paxos Trust and Circle to offer cards for crypto companies. Mastercard also has a credit card in the works for crypto exchange Gemini.
  • The cards often offer crypto rewards to entice spenders. Crypto-focused cards offer a way for Mastercard to reach younger consumers who are often averse to traditional credit cards.

Mastercard's growing presence in crypto raises a question: Will decentralized crypto re-centralize? Mastercard's payments network is the second largest behind Visa's, and it's a valuable asset. It's also at odds with the spirit of crypto.

  • The ideal of crypto is a decentralized network where no central company controls and manages the network. That's not necessarily good for companies like Mastercard. But there are still many ways for Mastercard to be involved in crypto payments, if they do take off.
  • Consumer demand to make payments in crypto isn't proven yet, Mastercard's Chief Product Officer Craig Vosburg told my Protocol colleague Ben Pimentel. But if there's demand from consumers or businesses to do that, then "that's something we'll want to facilitate," he said.
  • Mastercard last year started a system for testing central bank digital currencies. More generally, stablecoins, which are typically backed by defined assets, not just an algorithm, and are supposed to hold stable value, make sense as a place for Mastercard to experiment for future payments options.
  • Mastercard said this year it plans to move crypto onto its existing network. As of now, it converts crypto to fiat, which isn't as efficient.

Some of the most popular cryptocurrencies have serious flaws as payments tools: Transactions take too long to settle and cost too much. These are problems Mastercard and Visa solved long ago (though many would be happier if their transactions cost less, too). As we saw with the development of the internet, technologies that are decentralized in theory can end up centralized in practice. Either way, Mastercard wants to be in the picture. It's just a question of whether crypto transforms the payment system, or the payment system transforms crypto.

— Tomio Geron


In the last year, cryptocurrency has hit all-time price highs, reached new users, and become a bigger, more mainstream part of financial strategy for both individuals and institutions. But cryptocurrency adoption doesn't look the same everywhere. People all over the globe use cryptocurrency in different ways depending on their unique needs.

Learn More

From Protocol | Fintech

California's coming for income share agreements. A recent order by California regulators classifying income share agreements as student loans could have a wide-ranging impact on how they're handled nationwide.

Fake crypto press release pumps prices. A Walmart press release announcing a "major partnership" with litecoin sent the cryptocurrency soaring early Monday, before it quickly plunged again after the report was exposed as fake.


"The U.S. is absolutely the best place to build crypto innovation if we can get it right. And American citizens (and voters!) overwhelmingly want it."Coinbase CEO Brian Armstrong, who has recently sparred with U.S. regulators.

"It is such a rookie mistake for a CEO to go to war with the SEC, and unless you're Elon Musk just don't do it, you know you got to work with them, they are your regulator." Nick Colas, co-founder of DataTrek Research, on Armstrong's Twitter beef with the SEC.

"A little less than a decade ago, I thought that Brian Moynihan should be fired as CEO, but now I think he's one of the best."Wells Fargo analyst Mike Mayo on the Bank of America CEO, who is keeping his post a few more years.

3 Questions With …

Matt Woods, CEO,

What fintech trend are you most excited about?

I am most excited about the models that are focused on simplifying the home buying [and] selling process. Each side of the transaction is currently too expensive, lengthy and stressful. On the buy side, there are models emerging that are attacking these problems through cash empowerment, i.e., companies that help fund purchases, and discount brokers that are rebating commissions back to buyers. We're also seeing models that help with cash offers on the sell side, and trade-in models that connect both sides of the transaction. These are some of my favorite models that are gaining traction with consumers as they come to understand them.

What fintech trend is most troubling for you?

I admit the one that gives me pause is the rise of the single family rental [REIT] companies. While there are benefits of scale in most industries, there is also risk in having major corporations own and operate significant market share in the U.S. rental market. By no means am I against these entities, but we, as a society, should understand and debate the impact of these super-landlords, and how much power they can and should wield over the underserved.

What's your favorite pastime that doesn't involve a screen?

I'm a runner. It is the greatest love/hate relationship. As soon as I start running, I wonder why I chose to run. My heart rate is through the roof and it's hard. If you push through it, you eventually find your stride. And by the time I'm done, I start looking forward to my next run. The runner's high is a real thing. It's also where I do my best thinking.

Need to Know

  • Intuit is buying Mailchimp. The financial services software company is acquiring the email marketing company for $12 billion. Venture capitalists' take: $0, because 20-year-old Mailchimp was bootstrapped.
  • Brevan Howard is forming a crypto unit. The European hedge fund is setting up BH Digital to manage crypto and digital assets.
  • Monzo is entering the "buy now, pay later" space. The U.K.-based challenger bank is rolling out a new checkout feature that would let consumers pay for purchases in installments.
  • Square is expanding in Canada. The financial services company has launched Square Register, its point-of-sale system, in Canada, offering businesses touch-free payments, online sales, contactless pickup and other services.
  • Nubank formed a partnership with Creditas. The Brazilian neobank will make the products of the financial services company available to Nubank customers.

Making Moves

  • Adi Jayaraman is reportedly joining Evercore. The Citi executive will lead the investment bank's fintech business. He also previously served as an executive at J.P. Morgan and Morgan Stanley.
  • Jodi Golinsky has joined Current as general counsel. She was formerly associate general counsel at Shopify, per her LinkedIn.

Deal Flow


In the last year, cryptocurrency has hit all-time price highs, reached new users, and become a bigger, more mainstream part of financial strategy for both individuals and institutions. But cryptocurrency adoption doesn't look the same everywhere. People all over the globe use cryptocurrency in different ways depending on their unique needs.

Learn More

Data Point

$100 million

That's the value of outstanding invoices Facebook will buy as part of an initiative supporting small businesses owned by women and minorities. The idea is to get cash owed to the businesses in their hands faster.

Thanks for reading — see you Friday!

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