MasterCard Is Not so Keen on Digital Currencies

June 10, 2024 by
MasterCard Is Not so Keen on Digital Currencies

Image credit: AntanaCoin

MasterCard has answered the UK Treasury’s call for information on digital currencies.

Issued in November of last year by the UK Treasury, the “Digital Currencies: Call for Information” asked stakeholders to expound on the values of digital currencies, whether the government should embrace the potential innovation, and whether or not digital currencies should be regulated.

MasterCard’s response includes one positive tidbit: “Digital currencies are currently a small part of the electronic payments landscape but have the potential to become much more significant payment systems.“

The rest of the response is largely critical of digital currencies when it comes to speed, trust, and compliance.

It takes on average ten minutes to verify a block, or a network consensus of validated transactions, meaning a transfer of bitcoin from one person to another is finalized in a lengthier amount of time compared to a credit card transaction.

Since there is no central issuing authority, “if a digital currency system collapses then all funds are lost.“ This is in comparison to government-backed currencies that are insured in case of a bank collapse.

The most pressing issue, MasterCard argues, is that digital currency businesses must gain the trust of consumers at large.

Global payment networks are closely regulated with KYC, AML and consumer protections in mind. MasterCard argues that digital currency businesses “should offer all the basic protections that service-users have come to expect when using more established electronic payment systems.”

Of course, MasterCard is just one voice in a sea of proponents and detractors, each with their own agendas. It’s ultimately up to the UK Treasury to find a balanced approach to regulation.

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