Rob Reeg, president for operations and technology at multinational payments giant Mastercard has revealed that while the company is invested in blockchain technology, he doesn’t care for Bitcoin.
The global payments landscape is primarily dominated by Visa and MasterCard, in that order. In a time where a disruptive new innovation like Bitcoin has already scaled and survived beyond many observers’ expectations, it is perhaps prudent that the giants take notice.
Visa, for instance, summed up 2015 in noting that bitcoin and blockchain became “more real than ever before”, as the year that saw blockchain as an innovation that “the industry has to live with.” The payments leader has also notably sought talent for developing and researching virtual currencies, blockchain and other emerging payment technologies. Furthermore, the company is already pooling in engineers to develop blockchain technology, with one proof-of-concept already seeking participants among European banks.
Meanwhile, Mastercard also has a track record in acknowledging bitcoin and blockchain technology, in its own way. A notable instance of telling insight on the way MasterCard views bitcoin came to the fore when the payments company responded to an official UK Government public call for information on digital currencies.
“[W]e would argue that, when compared to Mastercard’s network, the claims pertaining to the speed and safety for digital currencies does not hold up,” MasterCard wrote in response. The company also questioned the security of the bitcoin blockchain and argued that the current network of global transactions go through a regulated environment, instead of relying on a “block chain” process. Suffice to say, MasterCard doesn’t think much of Bitcoin, from its downbeat response to the UK government’s call to garner insights and opinions on digital currencies, last year.
That dismissive outlook toward Bitcoin hasn’t changed and seemingly permeates among the top executive channels in the company. During an interview with Indian publication the Business Standard, Rob Reeg, MasterCard president for operations and technology, was asked about blockchain technology and Mastercard’s endeavors with the technology, if any.
To this, Reeg answered:
It is an interesting technology and we are working on it. I personally don’t care about Bitcoin, but I do care about blockchain technology.
The dismissive take on bitcoin coincides with that of a prominent Wall Street executive, JP Morgan CEO Jamie Dimon, who has previously stated that bitcoin wasn’t going anywhere, further labelling the cryptocurrency a waste of time on a separate occasion.
While unsolicited, Reeg’s flat denial of bitcoin was followed by the revelation that MasterCard was working on two blockchain pilot projects, one a combination of private and public (permissioned and permission-less) blockchain, the other a private blockchain. Perhaps revealing further insights into why a public blockchain, like bitcoin, wasn’t in the list of priorities for Mastercard, Reeg stated:
For [a] company like us, while managing people’s money and information, [the] security aspect of blockchain is [a] little bit daunting. The idea behind blockchain is unregulated power, but that is never going to be a first choice when the security is [of] concern.
The executive’s opinion about security and the suppposed safety net of regulation comes during a time that sees financial services institutions fined billions for facilitating money-laundering, swindling money from everyday citizens and racially discriminating against minorities. These instances are a fraction of the banks and financial institutions that were caught, within the past 10 years.
Unregulated power governed by code could be exactly what the world needs.
Featured image from Shutterstock.
Last modified: August 12, 2020 8:02 AM UTC