With all the talk of Visa, PayPal and now Mastercard delving into the cryptocurrency space and looking at the possibility of using the new digital currency arena for potential future payments networks, it’s also worth asking what has been keeping things back for so long.
Bitcoin was created, over 10 years ago, to be used as a peer-to-peer cash system and had all the hallmarks of a technology ahead of its time in regards to the transfer of value across the internet. It looked purpose-built to be picked up and used as a payments network.
However, there were, in hindsight, a number of things that needed to be addressed, but in these last 10 years many have. Bitcoin is now far more legitimized and normalised, and the ensuing cryptocurrency space has looked to address other issues that Bitcoin could not.
However, there is still not that much growth in the space in regards to using crypto as a payments network — although that might be changing. There are more than enough instances of companies looking at blockchain, and cryptocurrency, but the next wave seems to be to look at this technology for its payment potential.
What is keeping it back?
At the moment, the crypto realm is very much ripe with potential to be implemented into a payments setting — and the evidence of CBDCs and Stablecoins add fuel to this fire, but there are also a lot of things holding it back.
The Daily Chain spoke with Suman Hughes, Director of Communications at Mastercard and she explained:
“We strongly believe that for digital currencies to become trusted payment instruments for consumers or businesses, it is essential that they offer stability, regulatory compliance and consumer protections.”
“Many of today’s 2,600 digital currencies today fail to do this.”
“Having operated multiple secure, safe, scalable payment networks around the world for many years, Mastercard is committed to bringing that experience to emerging blockchain networks and digital currencies. Our participation in these initiatives are guided by the same principles we apply to our own networks.
“Provide strong consumer protection, including privacy and security of the consumers’ information and transactions; Deliver a level playing field for all stakeholders, including but not limited to financial institutions, merchants, and mobile network operators to contribute and benefit from the blockchain networks; and operate in full compliance with all applicable laws and regulations, including those applicable to anti-money laundering, and consistent with the economic systems of the countries the network operates in.”
Working towards it
Hughes highlights a number of key points that need to be seen before crypto can become the new norm in the payments world. But she also indicates that the global players are looking at this technology for the future and are hoping to play their role.
“We believe in the transformative power of blockchain,” Hughes added. “We hold the third-largest number of blockchain patents and patent applications, and from our provenance solution to commercial payments, our exploration of blockchain applications span our entire business ecosystem. And with several other public and private sector crypto initiatives also in progress including our partnership with R3 focused on cross border transactions, we will maintain true to our principles as we strive to expand financial inclusion and boost global prosperity.