TL;DR
-
Mastercard chose the New York BitLicense, considered the hardest to acquire, for their first license to operate digital currency business.
-
With the license Mastercard can settle transactions in stablecoin almost instantly, giving fiat and stablecoins a unified settlement layer.
Payments giant Mastercard has been awarded a BitLicense, the New York state license to operate digital currency business, by the New York State Department of Financial Services. This is a major step towards crypto integration for Mastercard. Licenses to operate digital currency business are given at the state level, and for their first license, Mastercard chose the New York BitLicense which is considered the hardest to acquire.
The license covers stablecoin settlements, tokenized deposits and digital-asset payment rails. For example, a regular card transaction is fully executed after 1-3 days. With their new license, Mastercard can settle transactions in stablecoin instead and fully execute almost instantly. Stablecoins also become a first class member of their transactions, so fiat and stablecoins have a unified settlement layer.
Mastercard has been working towards this for some time as in March they signed a deal for the stablecoin infrastructure company BVNK. The deal still has to get regulatory approval and officially runs independently until then. The technology BVNK built solves exactly what the BitLicense now allows them to offer; stablecoin settlements and neutral support for both fiat and crypto.
While the GENIUS Act, which passed last year, covers the issuance of stablecoins and recognizes them as settlement assets, it does not give the federal government the authority to license settlement. That’s why this power is still in the hands of the individual state regulators.
At this point, we’re waiting to see if regulators approve the purchase of BVNK. Until Mastercard either closes the deal or builds the technology themselves, the new license is just positioning. Currently they’re doing some of this through third parties, such as Gemini.
