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MasterCard willing to use state-issued cryptocurrencies

The card company’s Senior Executive is happy to look at using national digital currencies, but says anonymous cryptocurrencies are “junk.”

Written by Becky Leighton Published on

MasterCard announced that they are open to the possibility of using digital currencies in the future, as long as the currency sits under a central national bank and is not decentralized.

Ari Sarker, MasterCard Senior executive, told the Financial Times that if digital currencies were created by the government, they’d be “very happy” to consider them “in a more favorable way.” He went on to say that if are backed by regulators, they’d be of interest to explore, provided they are not anonymous.

Sarker also said that MasterCard is in discussion with over 25 Asian cities to introduce contactless payment systems and is already running other pilot programs in Singapore and Australia.

Earlier this year, both MasterCard and their rival, Visa, made it unattractive for customers to buy Bitcoin by classifying the purchases as “cash transactions”, which are offered at much higher fees.

In an interview last year the CEO of MasterCard, Ajay Banga, also expressed that they will “find a way to be in the game” if government mandated currencies are created. However, he stated that, in no uncertain terms, non-regulated cryptocurrency is” junk” and suggested that currencies need constancy and transparency in order to work, otherwise it might lead to “all the illegal activities in the world.

With decentralized banking as a key feature for most leading cryptocurrencies, this rules them out of Banga’s – and subsequently MasterCards’ – good books.

Several countries have considered national digital currencies, but the notion of a centralized cryptocurrency has not been established in its full capacity yet. The Venezuelan Petro is the most prominent case, with the potential for ‘Turkcoin’ and CryptoRuble waiting in the wings.

Banga also indicated that MasterCard was flying a cryptocurrency pilot program permitting customers to cash out of Bitcoin onto a card. He said that the test was a “toe in the water” with a “reputational risk”, however there were strict controls in place to avoid money-laundering and illegal activity.

With the unpredictable nature of cryptocurrency, such as Bitcoin, it seems as though Banga will steer the MasterCard ship clear of the platform unless it somehow becomes regulated.

This strict standpoint is an interesting one, considering that late last year MasterCard had opened access to Blockchain technology through its API and filed over 35 patents related to cryptocurrency.

Written by

Internet writer looking to find the right piece. Also presents things on radio and happens to be a chip off the old blockchain. @BeckyRLeighton

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