The Big Whale: Between your partnerships with several blockchains (Solana, Avalanche, Polygon...) and your new payment services, we've seen a lot of you on crypto in recent months. Has this become a priority for you?
Christian Rau: Mastercard is a technology company whose aim is to enable secure payments all over the planet. When I say that we are a technology company, it is to remind you that we are first and foremost agnostic.
Each year, we handle 9,000 billion dollars worth of transactions, which in volume terms represents 2 times Germany's annual GDP! Our aim is to secure these payments as well as possible, and if that means using blockchain and crypto, then we'll do it without hesitation.
Mastercard is at the heart of payment. How do you see the industry?
Payments are changing at the same pace as society, and society has probably never evolved so much. When I joined Mastercard, digital payment was still not widespread. Nobody wanted to pay for digital things. People downloaded everything, whereas now they use Deezer, Spotify, Uber, Netflix and all these other apps.
The arrival of these companies has transformed payment in the sense that there is no longer a difference between buying, paying for and consuming a service or product. A payment company like Mastercard has to adapt to these structural changes.
What is Mastercard's strategy?
It's quite simple: we want to extend the scope of payments as much as possible. We are a world leader in cards, whatever their form (plastic, dematerialised, etc.), but we are also present in payment via accounts, wallets (digital wallets), and obviously we are looking more and more at blockchain, which offers a secure alternative at scale.
There are many ways to use blockchain. What's yours?
What we've seen over the last 10 years is that consumers want to invest in digital assets. Just as individuals wanted to buy online from Amazon, they now want to be able to buy digital assets and move their cryptos via their accounts on Coinhouse or Bitpanda.
We think they should be able to do this via their payment card. This is what we call Onramp. In the other direction (Offramp, editor's note), they should be able to withdraw their cryptos and convert them back to the world of traditional currencies.
The crypto industry was partly built on the idea that fiat currencies like the euro and the dollar were not viable. What's your take on this?
I don't share this view. Money doesn't disappear, it evolves, and that's what interests me most. After 3,000 years of cash, policymakers and central banks have started to imagine a different monetary future.
They have realised that in a more digital world, money will also evolve, and that is why they have all accelerated their thinking about stablecoins and central bank digital currencies (CBDCs).
How do you see this new landscape?
We're going to have central bank digital currencies, stablecoins like Circle's or Société Générale's, and of course also non-stable tokens like bitcoin, ether and other crypto assets. The latter are not currencies as such, but new forms of payment.
As a payment giant, we need to keep innovating without making concessions with such important rules as security, consumer protection, and of course KYC and AML policies. That's why we're looking so closely at everything that's happening with MNBCs, stablecoins and even bitcoin, even though we don't want bitcoin on our network.
As you explained, blockchain is a new payment route. Why are you setting cryptos, and Bitcoin in particular, apart?
Imagine you want to buy a computer in a shop. You have the choice of paying 1,500 euros or 0.026 bitcoin (at the current rate of 61,000 dollars). You decide to pay in bitcoin and between the time you decided to pay in bitcoin and the transaction being executed, Elon Musk made tweets that caused the value of bitcoin to plunge by 10%.
In the space of a few seconds, you have a computer that is much more expensive! Who wants to take that risk? Similarly, if you buy the computer and 2 weeks later you want to return it. How much will you be reimbursed? Should we take today's rate or the one from 2 weeks ago? Who bears this risk?
Bitcoin is still too volatile. There are too many compliance issues to manage especially under the supervision of the European Central Bank (ECB). From my point of view, Bitcoin is not efficient in terms of compliance. And I'm not even talking about the number of transactions, which is still too limited compared to what we're capable of doing with our own network.
What do you think is efficient today?
It's clearly stablecoins. They provide all the value of blockchain without the constraints of cryptocurrencies, i.e. reliability, speed and availability. You can make an instant transaction on a Sunday morning without depending on anyone.
We can also do that with cryptos...
I'd like to make it clear that we're not against bitcoin and cryptos, and we allow you to pay with them, but according to a very clear process.
That is?
Imagine you're in Carrefour or another shop. When you pay with your Mastercard, there is an authorisation request from Carrefour to the platform where your bitcoins are. If the platform confirms that you have the money, your bitcoin is converted into euros and the transaction is completed.
Today, you can use bitcoin anywhere Mastercard is accepted, but we don't touch the bitcoin directly. Only the platform is in contact.
When it comes to using our own network, we use stablecoins, which are currencies regulated and supervised by central banks. We were the first to integrate the use of CBDCs into our network with the Central Bank of the Bahamas. We have also done so in Kazakhstan.
How do you explain the success of these new forms of payment?
We have to be honest, the financial system can still be vastly improved, even in areas like Europe.
Just take the case of payments: today, they still take far too long. If I make a transfer to you on Thursday, it won't appear in your bank account until tomorrow (Friday, editor's note).
Stablecoins are a major revolution. They allow you to make transfers almost instantly and 24 hours a day. Imagine you're an online merchant and you want to get paid as soon as possible. Which system do you choose? Asking the question is already answering it! With stablecoins, you'll get paid immediately.
And here we're talking about a situation where you pay right away. It's even worse with invoices where there are delays and late payments. To avoid being penalised too much by late payment, some companies sell their invoices to a bank at 98% of their price so that they get the money straight away and don't have to wait. Why don't we put these invoices on a smart contract? It would save us a lot of time. There are a lot of operations that are going to be put on the blockchain and Mastercard must be one of the players that gives access to this universe.
What are you working on at the moment?
We're working on a lot of things. There are, of course, our crypto cards, our support programme for crypto start-ups, and the partnerships we have forged with blockchains such as Solana, Avalanche and Polygon. The aim is to provide them with our expertise in terms of security and also to create bridges with the more traditional world.
But more generally, given that our ambition is to be a gateway to this new world, we are working on our multi-token network, which should provide access to this universe with the best possible KYC. We've been working on this for a year. The platform is still in the test phase in the UK, but we're making good progress!
