Mastercard CEO Sees Cross-Border Payments as Top Stablecoin Use

Cross-border payments are currently the clearest use case for stablecoins and are where Mastercard Inc. is seeing the most traction for the new form of digital money, according to Chief Executive Officer Michael Miebach.

“If you make a cross border payment it takes days, the fees are unclear,” Miebach said in an interview with Bloomberg TV in London on Friday. “From a working capital perspective for a company, if you could move the money instantly it would be so much better.”

Mastercard — alongside Visa Inc., Stripe and around 100 other companies —  is among the backers of a new firm called Open Standard that recently issued a US dollar-pegged stablecoin. The effort aims to bring the digital tokens into wider mainstream use.

Mastercard was keen to “create a stablecoin particularly focused on moving money instead of investment purposes,” Miebach said.

Stablecoins are a type of cryptocurrency designed to maintain a steady value, typically by being pegged to a traditional asset such as the US dollar. They’ve risen in popularity over the past year as banks and other established financial firms increasingly view the tokens as a viable way to make payments faster and cheaper.

The push has gained momentum with support from President Donald Trump’s administration, which is weighing an initiative to promote the use of the dollar-denominated tokens overseas.

Read More: US Weighs Initiative to Promote Dollar Stablecoins Abroad (2)

Mastercard has been among the most active traditional payments companies in stablecoins, earlier this year acquiring infrastructure provider BVNK in a transaction worth up to $1.8 billion.

Miebach is meeting with companies in London that are showing interest in stablecoins, which presents his payment services company with opportunities, rather than a threat, he said. Still, he’s not yet expecting widespread adoption of stablecoins across the consumer world, he added.

Turning to other technologies, Miebach said artificial intelligence is “fundamentally a good thing” but comes with extra risk.

“AI is enabling the fraudsters and the scammers as much as the defenders,” he said.