Despite various countries, including China, Singapore, Canada, Israel, South Africa, exploring the application of central bank-issued cryptocurrencies, the phenomenon of the centralized crypto still remains far-off.
The payments giant Mastercard, which considers non-government mandated cryptocurrencies as junk, is keen on supporting state-backed cryptocurrencies.
According to the Financial Times, the world’s second-biggest payments company Mastercard, is keen on supporting state-backed cryptocurrencies.
Ari Sarker, the co-president of Mastercard Asia-Pacific, in an interview with the Financial Times, stated,
“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.”
Adding on, he said,
“So long as it’s backed by a regulator and the value…it is not anonymous, it is meeting all the regulatory requirements, I think that would be of greater interest for us to explore.”
Despite various countries, including China, Singapore, Canada, Israel, South Africa, exploring the application of central bank-issued cryptocurrencies, the phenomenon of the centralized crypto still remains far-off. The controversial Venezuelan oil-backed Petro became the first state issued cryptocurrency, which has been launched by the president Nicolas Maduro in order to escape U.S. sanctions against the south American country. It is to be noted that China and Singapore have already successfully undertaken trials of digitized versions of their fiat currency on a blockchain.
In 2017, the company’s CEO Ajay Banga, while calling all non-government cryptocurrencies as “junk,” 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.”
Moreover, Sarker, the senior executive also revealed that MasterCard has a Bitcoin (BTC) to fiat pilot currently underway in Japan and Singapore.
This bitcoin-to-fiat pilot would enable BTC holders to cash out onto a MasterCard, which involves both KYC and AML.
“We are not operating trading bitcoin through the Mastercard network. The pilot is a toe in the water, we’re fully cognizant of the reputational risk,” says Sarkar.
The Financial Times further reported that Mastercard and rival Visa have both classified bitcoin purchases as “cash transactions”, which will add fees for their crypto customers. In November 2017, Mastercard filed a patent for instant payments using Blockchain technology and more such patents have been filed by the payments giant. In addition to this, Mastercard has also launched three blockchain APIs which offers real-time settlements, smart contracts and a toolkit for users running their own nodes on a blockchain.
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