Payments giant Mastercard is fully behind supporting state-backed, central bank-issued cryptocurrencies, a senior executive has revealed.
In an interview with the Financial Times, Mastercard Asia-Pacific co-president Ari Sarker has opined that the world’s second-biggest payments company would be “very happy to look at” supporting national digital currencies that are issued and backed by central banks.
He told the publication:
“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].”
“So long as it’s backed by a regulator and the value…” he said, adding “it is not anonymous, it is meeting all the regulatory requirements, I think that would be of greater interest for us to explore.”
Central bank-issued cryptocurrencies are currently garnering plenty of interest amid widely-publicized research efforts undertaken by a number of nations including China, Singapore, Canada, Israel, South Africa, Sweden and more. They are, however, yet to materialize despite the likes of China and Singapore successfully trialing digitized versions of their fiat currency on a blockchain. The first notable release of a state cryptocurrency, for better or worse, is the controversial oil-backed Petro, proclaimed as a national cryptocurrency that will evade international sanctions by Venezuelan president Nicolas Maduro.
The Mastercard executive’s revelatory remarks follow those of president and CEO Ajay Banga who dismissed all non-government mandated cryptocurrency as “junk” last year. “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,” he stated at the time. “The government mandated digital currencies are interesting. Non-government mandated currency is junk.”
Further, Sarkar touched upon a bitcoin-to-fiat pilot that enabled customers to “cash out of bitcoin” over to a MasterCard. Few details are known, but a pilot is currently underway in Singapore and Japan even though it hasn’t reached any particular resemblance of “scale”, according to the executive.
“We are not operating trading of bitcoin through the Mastercard network,” Sarkar said of the decidedly cautious approach by Mastercard. “[The pilot] is a toe in the water, we’re fully cognizant of the reputational risk.”
Aside from filing for blockchain-related patents last year, Mastercard has also unveiled three blockchain APIs that covers features including real-time settlements, smart contracts and a toolkit for users running their own nodes on a blockchain.
Mastercard and rival Visa have both classified bitcoin purchases as “cash transactions”, the FT report adds, putting a hurdle for users to purchase cryptocurrencies due to higher fees. Sarkar’s take on Mastercard’s lack of support for decentralized cryptocurrencies is entirely expected and far more reserved than those offered by Visa’s finance chief who mouthed off a privileged tirade against cryptocurrencies recently.
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Last modified: June 11, 2020 10:09 AM UTC