Stablecoins hold promise for faster and more efficient payments, but unlocking that potential will take more work on the infrastructure behind them, according to Mastercard.
Stablecoins are a type of cryptocurrency built to maintain a steady value by being pegged to an asset such as the U.S. dollar. Matthew Driver, executive vice president of services for Asia Pacific at Mastercard, told CNBC in an interview that they could be especially appealing for certain remittance corridors and for less commonly traded currency pairs.
Driver cautioned against what he called a "stablecoin sandwich." The term describes a slow on-ramp into stablecoins, a fast transaction in the middle, and a slow off-ramp back into traditional fiat currency. In that situation, he said, the speed of the middle step does not necessarily make the overall payment any quicker.
One way to address the problem is to link real-time payment systems to stablecoin exchanges at both ends of a transaction. Even then, Driver said, "you still need to enable the infrastructure," and market participants must be able to use the technology effectively.
He added that opportunities will differ from one market to another. In Singapore, where retail payments are already highly efficient, stablecoins may have fewer uses in consumer transactions. Corporate payments, by contrast, could offer more room for growth there.
Driver also pointed to smart contracts as a possible use case for business payments. These allow a transaction to be carried out automatically once certain conditions are met.
He said interest in stablecoins has grown since the U.S. GENIUS Act was established.
His remarks come as Mastercard deepens its involvement in digital assets. The company completed its acquisition of stablecoin infrastructure provider BVNK in August. Earlier this month, Mastercard and BVNK introduced Global Money Platform, a product meant to help banks, fintechs and businesses handle payments involving both traditional currencies and stablecoins through a single application programming interface.
Speed is not the only focus. Driver said Mastercard also wants to bring blockchain and identity data into its approach, with the aim of establishing the same level of trust that people expect across other payment systems.
