Expansion of Mastercard's collaboration with Circle for facilitating stablecoin transactions within EEMEA regions
Mastercard and Circle Partner to Improve Cross-Border Transactions in EEMEA Region
In a recent press release, Mastercard and Circle announced a partnership aimed at enhancing cross-border transactions in the EEMEA (Eastern Europe, Middle East, and Africa) region. The specific terms of the partnership were not disclosed in the press release.
This partnership builds on earlier work between Mastercard and Circle, which has already resulted in crypto card solutions with Bybit and S1LKPAY. The new initiative is intended to make cross-border transactions in Africa cheaper, faster, and more reliable, addressing the current fragmented and costly state of the digital economy in the region.
The expansion of this partnership is significant, as the digital economy in Africa is rapidly expanding but remains expensive for payments. In some countries, remittance fees can climb as high as 20%, making it one of the most expensive regions for sending money. Sub-Saharan Africa, in particular, is the world's most expensive region for sending money, with an average remittance fee of 8.45% per transaction in the third quarter of 2024, according to the World Bank.
The new system allows institutions in the EEMEA region to receive their settlements in USDC or EURC, stablecoins that are intended to make these transactions cheaper, faster, and more reliable. This could complement the Pan-African Payment and Settlement System (PAPSS), which settles regional trade in local currencies but does not yet address foreign currency flows.
Arab Financial Services and Eazy Financial Services will be the first institutions to use this new system. Kash Razzaghi, Chief Business Officer at Circle, made a statement regarding the initiative, while Dimitrios Dosis, president for Eastern Europe, Middle East, and Africa at Mastercard, also commented on the partnership.
Mastercard claims this will make cross-border trade in emerging markets cheaper, faster, and more reliable, which could have a significant impact on the region's digital economy. The partnership between Mastercard and Circle is set to revolutionise the way institutions in the EEMEA region conduct cross-border transactions, making it a promising development for the future of the digital economy in Africa and beyond.
