Mastercard, PayPal and Robinhood dive deeper into crypto as industry shows ‘promise’

For TradFi, crypto is in a ‘transitionary period’ and needs more on-ramps

As the crypto market works its way through a downturn, more incoming money and users could help it weather the storm.

But right now, it’s sometimes challenging for the layperson to get into crypto. Understanding gas fees and wallets isn’t intuitive, and the perceived miasma of complication that currently surrounds the space is no help, either. To help foster user adoption and the resulting capital inflow, web3 needs smoother on- and off-ramps to make it easier to buy into and interact with blockchains.

Trusted providers with existing mainstream audiences are betting they can help fill that gap.

In recent weeks, a number of brand-name mainstream financial institutions have been rolling out new crypto products and services in an attempt to make the space more accessible. At the end of April, Mastercard, PayPal and Robinhood all independently talked about the measures they’re taking to do so at Consensus 2023 and how they are furthering their moves into the crypto ecosystem.

“Despite the market, we continue to be at the cusp of mainstream adoption,” Jose Fernandez da Ponte, SVP and GM of blockchain, crypto and digital currencies at PayPal, told TechCrunch+. “We got into this technology because we believe it contributes to the idea of a faster, more inclusive financial services environment,” Ponte said.

The crypto ecosystem is in a “transitionary period,” according to Raj Dhamodharan, EVP of blockchain and digital currencies at Mastercard. The industry is figuring out the technology and what else can be extracted from it, and “a lot of energy is going to figuring out the next use cases,” he said.

People new to crypto are likely to be more willing to use a platform that they already know and trust to buy into web3 products and services. Household financial names opening their doors to the ecosystem could prove to be the catalyst that pushes crypto from a niche to something more.

On April 28, Mastercard launched “Crypto Credential,” a set of standards and infrastructure that aims to help certify interactions between consumers and businesses using blockchain networks.

“We’re excited about the underlying technology and the promise the technology offers,” Dhamodharan said. “We think public blockchains can be a utility to store and move value over time … and you have to show that you can do it in a regulatory compliant way.”

Mastercard is working with crypto wallet providers Bit2Me, Lirium, Mercado Bitcoin and Uphold to enable transfers between the U.S., Latin America and the Caribbean. The card issuer is also teaming up with blockchain organizations like Aptos Labs, Ava Labs (creator of Avalanche), Polygon and The Solana Foundation to bring the set of standards to developers in each ecosystem.

Robinhood also unveiled its latest crypto creation, Robinhood Connect, which will allow its customers to provide capital for their web3 wallets without having to leave a decentralized application or be in their Robinhood crypto accounts. It is also adding more in-app features like advanced charts and order types for trading, a dedicated crypto tab on the app’s homepage and price alerts.

Robinhood has over 11.4 million monthly active users with $62 billion in assets under custody, as of December 31, according to its website. Johann Kerbrat, crypto general manager at Robinhood, declined to share what percentage of its MAU were also crypto users.

“We still see crypto as an operating system for finance of tomorrow,” Kerbrat said. “There’s a ton of value there, and I think for us, it was very important to give [greater] access to customers.”

People also want to do “more complicated things” with crypto, Kerbrat said, adding that Robinhood’s users have said it’s hard to get into web3 due to complicated barriers. So trying to improve the customer crypto experience was a “no brainer,” he said.

PayPal also showed off a new feature that enables customers to transfer crypto across its sister properties, Venmo and PayPal, as well as other wallets and exchanges in the digital asset ecosystem. The feature is an effort to provide “more choice and flexibility” to users, the company said. Crypto transfers will roll out to Venmo customers over the coming weeks starting in May 2023.

“If you look at the way we’ve been building things, it’s been deliberate,” Ponte said. “Consumers want the ability to move and have choices.”

Over the last 12 months, more than 74% of Venmo crypto customers have continued to hold their crypto in their Venmo accounts, and since the beginning of 2023, about 50% of customers with existing crypto balances added to their holdings on Venmo, according to internal PayPal data. So a majority of Venmo’s crypto customers still held their capital, regardless of market volatility, and about half have added to it since, which may point to a sentiment that there’s opportunity for more growth.

But the way crypto is going to evolve long term is by bringing in all the regulated financial players and big institutions into the ecosystem and helping them build applications that can scale, Dhamodharan said. “Similar approach to how the internet has evolved overtime: You have VPNs and private businesses, but the internet is still a decentralized public utility. The same thing needs to happen in the public chains.”

“From the TradFi space, I do believe companies are doing fascinating work [in crypto] like Fidelity, Franklin Templeton and BlackRock — we’re seeing more and more from financial services,” Ponte said. Even amid a crypto winter, he doesn’t expect any institution to pull out. “Folks who are committing are staying committed.”

To that note, Robinhood has a “strong belief that web3 is here to stay and wants to be there to help the customer get there,” Kerbrat said. “We’re committed to the web3 space.”