MasterCard reveals that it is open to cryptocurrency but with a catch

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The Credit Card giant MasterCard said they are open to cryptocurrency but with a catch

Banks have infamously been stable in their opposition to cryptocurrencies, and this is for a justifiable reason. The peer-to-peer economic marketplace of digital currencies is a direct threat to the current financial monopoly held by banks and other financial institutions. Which is the reason it was unforeseen while an executive at MasterCard said that the credit card issuer was open to the overall use of cryptocurrency. However, there is a significant catch to this announcement.

Crypto Cold Feet

MasterCard has put a considerable amount of time and effort into blockchain technology, yet they are not precisely devotees of virtual currencies like Bitcoin. It was unmistakably clear when Mastercard and Visa classified the purchasing of cryptocurrency as a cash advance instead of a purchase.

At the time, the credit card giant said:

“Over the past few weeks, we have clarified to acquirers – or the merchant’s bank – the right transaction or merchant category code to use for these type of transactions (cryptocurrency purchases). This provides a consistent view of such purchases for both merchants and issuers.”

The result was that using VISA for purchasing Bitcoin and different cryptocurrencies became more expensive. Exchanges charged a higher fee, and clients started accruing interest from the minute they used a card.

The Catch

It gives the idea that the financial Juggernaut has now changed their tune, however actually they, but they have not. Addressing the Financial Times, Mastercard executive Ari Sarker says that the company is “pleased” to consider helping the use of cryptocurrencies, however just as long as central banks issue those virtual currencies.

Ari Sarker says:

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

He included:

“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.”

Right now, the Financial institution is running a Test program in Japan and Singapore. Clients can cash out of Bitcoin and different cryptocurrencies onto their cards. However, Sarker says that the program isn’t a crypto trading one and that strict controls, for examples, anti-money laundering, and KYC, are in place.

This move by MasterCard should not shock anyone. Banks need to get their mitts on their share of the massive amount of revenue flowing through the crypto sphere, yet they need to do so while practising full control. Thus, the desire to only support cryptocurrencies issued by central banks.

Garry Singh

Garry is an experienced entrepreneur, and co-founder of a UK based technology company Quickdesk Solution Ltd., with a demonstrated history of working in the information technology and customer services industry. Skilled in technical writing, he is a strong business development professional with a Bachelor's Degree focused in Information Technology and Masters in Business Administration.