Mastercard “Very Happy” to Use Cryptocurrencies, Just Not Real Ones

Mastercard “Very Happy” to Use Cryptocurrencies, Just Not Real Ones

Economics

When you are an entrenched player deep within a certain system, especially one as complex and inflexible as the banking industry, it can be hard to implement changes, even when there is a critical need to adapt to emerging technologies. If a company wants to appear as if it is keeping up with the times, it can simply announce that it is piloting the new technology. Such appears to be the case with Mastercard and cryptocurrency transactions right now.

Also Read: US State Exempts Cryptocurrencies From Property Taxes

Master Govcoin Card

Mastercard “Very Happy” to Use Cryptocurrencies, Just Not Real OnesCredit cards giant Mastercard (NYSE: MA) is said to be keeping its options open on adopting the use of cryptocurrencies, under a just few caveats. The company reportedly wants to facilitate only fully-regulated, central bank-issued, non-anonymous coins. While such instruments are arguably not cryptocurrencies at all by definition, they also do not exist yet.

Although some central bankers have floated the idea of issuing their own digital currencies, either to help create a “cashless society” or to try and combat the popularity of bitcoin among young people, the plans have never gotten off the drawing board, assuming they weren’t just all talk to begin with. The closest attempt at implementation right now is the Marshall Islands’ Sovereign govcoin which is promised to come out later this year. And as the Russian Ministry of Finance recently informed President Vladimir Putin, the creation of a centrally-controlled decentralized coin is probably technically impossible.

“If governments look to create national digital currency we’d be very happy to look at those in a more favourable way,” Ari Sarker, co-president of Mastercard’s Asia-Pacific business, told the Financial Times. “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.”

Just a Toe in the Bitcoin Ocean

Mastercard “Very Happy” to Use Cryptocurrencies, Just Not Real OnesThe company’s senior executive also said that Mastercard is running a cryptocurrency pilot program in Singapore and Japan, allowing some clients to “cash out” of bitcoin onto a card. However, this test is not “of scale” yet and the company has no exposure to bitcoin’s price.

“We are not operating trading of bitcoin through the MasterCard network,” Mr Sarker said. “The pilot is a toe in the water, we’re fully cognisant of the reputational risk.” There were strict KYC/AML (know your customer and anti-money laundering) controls, he added.

When should we expect to see national central banks actually issuing cryptocurrencies that Mastercard can use? Share your thoughts in the comments section below!


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SEC Actively Probes Dozens of Cryptocurrency ICOs

The SEC has cracked down hard on the ICO industry over the past few weeks. It now appears the agency has its sights set on several dozen companies. As a result of this course of action, two major companies have halted their ICOs altogether. It is evident we will see more of these developments in the coming weeks and months.

On the one hand, it is good to see the SEC stay the course. While the ICO industry is incredibly attractive, it also raises plenty of concerns. Companies seemingly continue to issue securities without registering with the agency. That unlawful course of action will need to be addressed sooner rather than later. By actively cracking down on companies like these, things will only improve for the industry as a whole.

SEC Continues to Hound ICO Projects

Over the past few months, several inquiries have been made by the SEC. In fact, the agency is now running dozens of investigations into ICO projects. This will hopefully help alleviate some concerns people may have in this regard. Moreover, this move will help weed out any illicit projects using this business model as a get-rich-quick scheme.

Two particular ICO projects have been shut down by the SEC in recent weeks. On the one hand, the KodakCoin ICO will not occur anytime soon. It is delayed until further notice, as the company seeks to properly verify accredited investors. Video-streaming service Stream has also postponed their ICO until further notice. There is additional guidance form the SEC to be handed down in this regard, as their tokens can theoretically qualify as securities.

While not all people may be in favor of the SEC in this regard, their decisions are positive overall. Bringing more legitimacy to the ICO industry is a top priority as of right now, yet that is much easier said than done. With more and more projects being investigated, it should become easier to issue universal guidelines in this regard moving forward. We can only hope the less legitimate projects seek other pastures sooner rather than later.

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