(Veteran tech stock columnist Jon D. Markman publishes Strategic Advantage, a lively guide to investing in the digital transformation of business and society. Click here for a trial.)

Crytocurrency is hitting the mainstream, and that is good news for big financial services companies.

Execs at Mastercard ( (MA) - Get Report) revealed this month that the transaction giant will begin accepting select cryptocurrencies in the latter part of 2021. Bitcoin is coming to plastic.

Investors should buy Mastercard -- but not for the reason you might imagine.

It should not be a great surprise that Mastercard managers are making the hop to crypto. Inside of the Purchase, New York-based company executives have been experimenting for years with digital currencies and blockchain, the clearing mechanism that underlies bitcon. The surprise is how quickly those plans are now being implemented.

Bitcoin is in the midst of being adopted by giant financial institutions. The oddity is all of this is happening everywhere at the same time.

The Wall Street Journal reported a week ago that BNY Mellon (BK), the oldest bank in the United States, will begin holding bitcoin on behalf of its clients. This is a really big deal. BNY Mellon is a major partner to some of the largest asset managers in the world. Its primary business is navigating the regulatory and legal frameworks of transferring financial assets. Bringing bitcoin into its platform will give clients confidence to invest in the cryptocurrency.

BNY Mellon follows Fidelity Investments into the world of crypto. The Journal notes that Fidelity won regulatory approval in 2019 to hold and transfer digital coins.

More recently large technology corporations have started accumulating bitcoin. Microstrategy ( (MSTR) - Get Report), Square ( (SQ) - Get Report), PayPal ( (PYPL) - Get Report) and Tesla ( (TSLA) - Get Report) have filed with the Securities and Exchange Commission to make crypto a part of their balance sheets.

The attraction is diversification away from the risks of traditional paper currencies like the U.S. dollar. Across the globe central bankers have been creating money supply at a fervent pace to stave off the negative economic effects of the COVID-19 crisis. In theory all of that money sloshing around in the system should lead to currency devaluation

By design, bitcoin has very limited supply. Only 21 million coins will ever be created. That scarcity should lift prices over time.

Mastercard now has the opportunity to accumulate a lot of those coins through the normal operation of its normal business.

What most investors still get wrong about credit card processors is their primary business is the transaction. They don’t have credit risk. That aspect of credit card use is born by the banks that issue the plastic. Mastercard processes transactions and collects a percentage as a fee. That’s it.

Mastercard managers are positioning the company to collect a fee on every transaction paid with bitcon using one of its branded cards. Simply collecting those bitcon fees could become a substantial asset over time.

Company executives are playing up the advantages for cardholders.

In a corporate blogpost Raj Dhamodharan, executive vice president of digital asset and blockchain products, wrote that the transition to accepting digital coins is all about choice. Consumers and merchants will have more payment options, plus the peace of mind knowing that everything is safe and secure.

That’s one way to look at bringing bitcoin inside of the Mastercard ecosystem. Another perspective is an unprecedented opportunity for the company to collect a massive bitcoin stake without diverting shareholder capital.

The dynamism of Mastercard’s transaction business cannot be overstated.

At an investor presentation in October managers revealed that the company logged $2.1 billion in operating profits on only $3.8 billion in sales. That’s a 54.9% gross margin. Net profits were $1.6 billion during a pandemic. Let that sink in.

For several years Mastercard has been successfully waging a public relations war against cash. All over the globe managers are lobbying governments to issue debit cards for transfer payments, and urging transit authorities and merchants to accept contactless payments. In a cashless world Mastercard gets a cut of every transaction, regardless how small.

Bitcoin is the final frontier.

Mastercard shares trade at 32x forward earnings and 21.2x sales. While these metrics may seem expensive keep in mind that the business is immensely profitable and many new opportunities, including cryptocurrency lie ahead.

Based on operating margins alone I believe the stock can reach $470 within 12 months. At a current price of $345.70 that is a 36% gain.