Friday, February 3, 2023

MasterCard ‘Very Happy’ to Support Crypto … With One Big Catch

MasterCard ‘Very Happy’ to Support Crypto … With One Big Catch

MasterCard, the world’s second-largest payments company, said it will back cryptocurrencies, but there is a catch — it will only support state-backed, fully-regulated, and non-anonymous coins. It seems the credit card giant MasterCard wants to keep its toes in the cryptoeconomy.

Also see: Dubai Employee Caught Red-Handed Stealing Cryptos

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MasterCard Keeps Its Options Open

In an interview, Ari Sarker — MasterCard Asia-Pacific co-president — told Financial Times that the company is “very happy to look at” support central bank-issued digital currencies. Sarker said:

“If governments look to create national digital currency we’d be very happy to look at those in a more favorable way [compared with existing decentralized cryptocurrencies].”

The interesting part is that such digital currencies do not exist yet, however, some governments and central bankers have proposed the idea of issuing digital tokens. The idea has gained plenty of interest and the primary motive to introduce such tokens is to develop a “cashless society.”

Pilot programs have been initiated by countries like Singapore, Sweden, China, South Africa, and others. Having said that, most of these proposed projects have seen no practical advancement. The Venezuelan cryptocurrency “Petro” is the closest to a state-backed cryptocurrency, though it is asset-backed by oil reserves, which the Venezuelan President Nicolas Maduro believes will be a way to circumvent U.S. sanctions.

MasterCard Working on Blockchain Projects

In the past, MasterCard CEO Ajay Banga referred to all unregulated cryptocurrencies as  “junk.” At the time, he stated:

“If the government creates digital currency, we will find a way to be in the game. We will provide rails for moving currency from customer to merchant. The government mandated digital currencies are interesting. Non-government mandated currency is junk.”

Lately, both payment services giants MasterCard and Visa classified bitcoin purchases as “cash transactions” which led to higher fees.

MasterCard is also running an experimental program where its clients can withdraw bitcoin to its card. However, the pilot program is limited to clients of Singapore and Japan.

The aforementioned Sarker noted:

“We are not operating trading of bitcoin through the MasterCard network. The pilot is a toe in the water, we’re fully cognizant of the reputational risk.”

As reported on Financial Times, payments powerhouse has filed over 30 patents that are associated with blockchain technology and cryptocurrencies to date. MasterCard research is also working on various blockchain projects that would further improve the financial ecosystem.

When will state-backed digital currencies be issued for real? Let us know your thoughts below.

Images via Fast Company, PYMNTS

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