Stablecoins could offer faster and more efficient payments, but realizing their full potential requires further development of the infrastructure supporting them, according to Mastercard.
Stablecoins, a type of cryptocurrency designed to keep a steady value via a peg to an asset like the U.S. dollar, could be attractive for certain remittance corridors and less commonly traded currency pairs, Matthew Driver, executive vice president of services for Asia Pacific at Mastercard, told CNBC in an interview.
"You don't want to have a 'stablecoin sandwich,'" Driver said, referring to a slow on-ramp into stablecoins, a fast transaction in the middle and a slow off-ramp back into fiat currency. That won't necessarily translate into faster payments, he said.
Connecting real-time payment systems to stablecoin exchanges on both ends of a transaction could help speed up payments, but "you still need to enable the infrastructure," he said, adding that market participants need to be able to use the technology effectively.
Opportunities for stablecoin adoption could vary across markets. In Singapore, where retail payments are already highly efficient, stablecoins may have fewer applications in consumer transactions, while corporate payments could offer greater opportunities, Driver said.