MetaMask, Mastercard and Baanx Pilot Debit Card
This innovative card allows users to manage crypto funds until the moment of transaction
August 14, 2024 08:55 PM
Reading time: 2 minutes, 12 seconds
TL;DR Popular DeFi wallet MetaMask has joined Mastercard and Baanx to launch a self-custody debit card pilot in the UK and EU. Expansion into other regions is planned.
Popular DeFi wallet MetaMask has partnered with Mastercard and digital payments company Baanx to launch a self-custody debit card pilot program for select United Kingdom and European Union users. Plans are already in motion to roll out the product in other regions over time.
The new card offers a unique advantage: users can self-custody their funds until the transaction is processed. At that point, the customer's digital assets are converted into fiat for payment at retail outlets, online shopping platforms, and other merchants.
How It All Works
In a statement to Cointelegraph, Lorenzo Santos, senior product manager at Consensys, they explained that users need to hold their crypto on the Linea network and use Linea to set spending limits on the card.
Santos also detailed the transaction process from start to finish. When a MetaMask card is swiped, an onchain transaction is created, sending tokens from the user's wallet to the "Crypto Life" smart contract.
This allows the merchant's point-of-sale system to authorize the transaction. This smart contract handles the conversion from crypto to fiat. Finally, the payment is finalized over Mastercard's payment network.
Customers will have the option of choosing which crypto asset will be used for payment. Users will also have the choice of where they store their keys, providing an added layer of customization and security.
"With 1.2 billion people in the world officially unbanked, we are working towards a vision whereby anybody with a mobile phone can access financial services," said Simon Jones, chief commercial officer for Baanx.
Banking the Unbanked
While the new MetaMask pilot is restricted to European markets, initiatives like this can bring banking services to the world's unbanked population.
These efforts could also streamline crypto payments for individuals living in high inflationary environments. The head of Nigeria's Securities and Exchange Commission, Emomotimi Agama, recently noted the potential for digital assets to extend banking services to the country's 38 million unbanked adults.
According to Chainalysis, cryptocurrencies accounted for 9% of the $5.4 billion in remittances sent to Venezuela in 2023.
The percentage of remittances sent to the South American nation has grown yearly since 2018, except for 2020, when COVID-19 caused widespread discrepancies in financial reporting.
Argentina is another example of a country where the population turns to crypto assets to sidestep the staggering 276% inflation rate afflicting their local currency.
The MetaMask debit card could serve as a lifeline for these individuals, offering a more stable and efficient means of transaction.
Overall, the partnership between MetaMask, Mastercard, and Baanx represents a significant step forward in integrating traditional financial systems with decentralized finance.
The pilot program could pave the way for broader adoption of crypto-based financial services worldwide.