MasterCard Open To State-Issued Cryptocurrencies
Ari Sarker, MasterCard’s Co-President of Asia-Pacific, said the payment company is fully behind supporting state-backed, central bank-issued cryptocurrencies.
In an interview with the Financial Times, Sarker said that MasterCard is “very happy” to consider helping the use of cryptocurrencies, but only as long as those cryptocurrencies are issued by central banks.
“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 cryptocurrencies],” Sarker said. “So long as it’s backed by a regulator and the value … is not anonymous [and] it is meeting all the regulatory requirements, I think that would be of greater interest for us to explore.”
MasterCard has made it tougher for customers to use their payment cards to purchase bitcoin. It recently re-classified customers’ cryptocurrency purchases as “cash advances,” leading to an extra five percent fee on purchases of cryptocurrencies made via credit card.
Sarker said the payment company is currently running a cryptocurrency pilot program in Singapore and Japan, allowing some clients to “cash out” of bitcoin onto a card. However, he said stringent know your customer (KYC) and anti-money laundering (AML) controls have been put in place. He warned the credit card company has no exposure to the wild swings of bitcoin’s price.
“We are not operating trading of bitcoin through the MasterCard network,” Sarkar said. “[The pilot] is a toe in the water, we’re fully cognizant of the reputational risk.”
In November of last year, MasterCard had filed a patent for instantaneous payments using blockchain. Also, a MasterCard spokesperson claims that the company’s research and development arm has filed for over 30 “patents related to blockchain technology and cryptocurrency.”
“MasterCard Labs is working on a blockchain technology that will support a wide range of use cases, including but not exclusive to [business to business] interbank payments, tracking trade finance obligations along the value chain, exchanging know your customer and anti-money laundering data between trusted parties, and more,” the spokesperson said.
Finally, Sarker added that MasterCard has also had “25 to 30 engagement discussions” with Asian cities about rolling out contactless payment systems that are similar to the one being used by Transport for London.
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