Mastercard Taps Ripple for Blockchain-Based Card Settlements
The pilot program will use Ripple's new RLUSD stablecoin to settle fiat transactions, a significant step for digital assets in mainstream finance.
Mastercard is partnering with blockchain payments firm Ripple to test the use of a stablecoin for settling consumer card payments, a move that pushes the boundaries of how digital assets are used within traditional financial networks.
The global payments giant announced the collaboration on Tuesday, detailing a pilot program that also involves WebBank and the crypto exchange Gemini. The initiative will use Ripple's recently launched U.S. dollar-pegged stablecoin, RLUSD, to settle fiat transactions made with credit cards on the XRP Ledger, a decentralized public blockchain.
The news triggered a notable reaction in the digital asset market, with the price of XRP, the native token of the XRP Ledger, jumping approximately 12%. The announcement also coincided with the creation of over 21,500 new XRP wallets, signaling heightened interest from the crypto community. In contrast, shares of Mastercard (MA), a company with a market capitalization of nearly $500 billion, saw a modest rise of 0.42%, underscoring the pilot's long-term strategic nature rather than immediate financial impact.
"Through our partnerships with Ripple, Gemini, and WebBank, we're using our global payments network to bring regulated, open-loop stablecoin payments into the financial mainstream," said Sherri Haymond, Global Head of Digital Commercialization at Mastercard. In a statement that emphasized a cautious and compliant approach, she added, "Guided by our commitment to consumer choice and a principled approach to stablecoins—one that emphasizes strong consumer protections, a level playing field, and full regulatory compliance—we're enabling settlement today while exploring how stablecoins can support future use cases.”
The pilot will initially involve the Gemini Credit Card, which is issued by WebBank. Under the program's framework, when a consumer makes a purchase, the transaction will be settled using the RLUSD stablecoin on the XRP Ledger, aiming to provide a more efficient alternative to traditional fiat settlement rails. Gemini will provide the secure custody for the digital assets involved.
For Ripple, this partnership represents a significant institutional endorsement of its technology and its new stablecoin. "This collaboration is a meaningful step toward modernizing how money moves," said Monica Long, President of Ripple. Long noted that financial institutions are increasingly recognizing that "blockchain and stablecoins are key to modernizing money transfers, offering compliant and secure payment solutions while streamlining settlement processes," according to the official announcement.
This initiative is the latest in a series of moves by Mastercard to engage with the digital asset ecosystem. The company has been actively exploring tokenization, central bank digital currencies (CBDCs), and other blockchain applications as it seeks to maintain its competitive edge against rival Visa and a growing number of fintech challengers who are building on new payment technologies.
The involvement of a federally-regulated institution like WebBank is critical to bridging the gap between decentralized technology and the established financial system. "Banks are uniquely positioned to bridge innovative blockchain technology with the stability of the traditional financial system," commented Jason Lloyd, President and CEO of WebBank. "Our collaboration...allows us to explore how stablecoins like RLUSD can make institutional payments faster and more efficient while maintaining the security and dependability customers expect from banks."
While the pilot is limited in scope, its implications are far-reaching. A successful trial could pave the way for wider use of public blockchains and stablecoins to settle a portion of the trillions of dollars that flow through card networks annually, potentially reducing transaction times and costs. The outcome will be closely watched by the financial industry as a key test case for the integration of blockchain technology into the core of global payments.