Posted on 02/10/2021 5:54:35 PM PST by E. Pluribus Unum
Whatever your opinions on cryptocurrencies — from a dyed-in-wool fanatic to utter skeptic — the fact remains that these digital assets are becoming a more important part of the payments world.
We are seeing this fact play out on the Mastercard network, with people using cards to buy crypto assets, especially during Bitcoin's recent surge in value. We are also seeing users increasingly take advantage of crypto cards to access these assets and convert them to traditional currencies for spending.
To be clear, this data is not of any individuals — it's anonymized and in aggregate — but the trend is unmistakable.
We are preparing right now for the future of crypto and payments, announcing that this year Mastercard will start supporting select cryptocurrencies directly on our network. This is a big change that will require a lot of work. We will be very thoughtful about which assets we support based on our principles for digital currencies, which focus on consumer protections and compliance.
Our philosophy on cryptocurrencies is straightforward: It’s about choice. Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value – traditional or crypto – however they want. It should be your choice, it’s your money.
Doing this work will create a lot more possibilities for shoppers and merchants, allowing them to transact in an entirely new form of payment. This change may open merchants up to new customers who are already flocking to digital assets, and help sellers build loyalty with existing customers who want this additional option. And customers will be able to save, store and send money in new ways.
We want to help these concepts flourish and reach their potential, while also developing and encouraging the necessary guardrails.
"We are here to enable customers, merchants and businesses to move digital value — traditional or crypto — however they want. It should be your choice, it’s your money." To be completely clear, not all of today’s cryptocurrencies will be supported on our network. While stablecoins are more regulated and reliable than in the recent past, many of the hundreds of digital assets in circulation still need to tighten their compliance measures, so they won’t meet our requirements. We expect consumers and the ecosystem as a whole will start to rally around the crypto assets that offer reliability and security. It’s those very same stablecoins that we expect to bring into our network.
What are we looking for? Four key items.
First and foremost we need consumer protections, including privacy and security of consumers’ information — the same level of security people have come to expect in their credit cards. Next, strict compliance protocols will be needed, including Know Your Customer, a requirement meant to snuff out illegal activity and deception in payment networks. Also, these digital assets must follow local laws and regulations in the regions they are used.
Lastly, people will want to use these digital assets for payments, so that is one of our criteria too. To reach our network, crypto assets will need to offer the stability people need in a vehicle for spending, not investment.
We are already working hard to provide this consumer choice for cryptocurrencies. We teamed up with Wirex and BitPay last year to create crypto cards that allow people to transact using their cryptocurrencies. We added to those partnerships this year by joining forces with LVL, an up-and-coming cryptocurrency exchange. These relationships — with many more planned in the pipeline — build on our many years of crypto collaborations.
In all of these cases, cryptocurrencies still don’t move through our network. Our crypto partners convert the digital assets on their end to traditional currencies, then transmit them through to the Mastercard network. Our change to supporting digital assets directly will allow many more merchants to accept crypto — an ability that’s currently limited by proprietary methods unique to each digital asset. This change will also cut out inefficiencies, letting both consumers and merchants avoid having to convert back and forth between crypto and traditional to make purchases.
Added to this work, Mastercard is actively engaging with several major central banks around the world, as they review plans to launch new digital currencies, dubbed CBDCs, to offer their citizens a new way to pay. Last year, we created a test platform for these banks to use these currencies in a simulated environment. Using our deep experience in payments technologies, we look forward to continuing these partnerships with governments and helping them explore the best ways to develop these new currencies.
With 89 blockchain patents granted globally with an additional 285 blockchain applications pending worldwide, we already have one of the payments industry’s biggest blockchain patent portfolios to draw from to make these projects successful.
We are inspired by so much of the work going on in the payments world — in banking, in emergent fintechs, in crypto — to push forward change. And we are doing as much as we can to set the stage for these players to take the next step forward.
Uh, huh. It’s about “choice”...until it isn’t anymore.
Only problem is when Joe says take his assets, poof your bitcoin is gone.
The charge card companies get a fee for each transaction was used on.
The fee is charged to the retailer receiving the funds.
Card companies hold the currency to be exchanged for the transaction for usually 3 business days...for use as they see fit.
After the 3 business days, the retailer gets his currency, minus the card company's fee.
This is why one see so many adds for Credit Cards, Debit Cards and Pre Paid cards.
Cryptocurrency is but one product of Blockchain Technology.
Blockchain is decentralized and does not need a centralized clearing network for completing transactions. In a cryptocurrency application, it is electronic cash one can transmit at a POS terminal from a smartphone to the POS Terminal’s register. No other third party is needed.
This decentralized model represents an existential threat to central banking and clearing. Anyone that has followed the reaction of central bankers over the last ten years will have noted some of the following scare tactics and market barrier efforts:
1. SEC investigators were prompted to investigate ‘suspicious’ hacking of blockchain accounts and to bring a halt to market offerings of crypto related securities. For those familiar with false flags, yes they have been used on cryptocurrency companies seeking a place in equity markets for investment to finance their growth.
2. Attempts to erect patent barriers to Blockchain apps by obtaining provisional patents on just about anything that crypto apps might use even if the usage was well established in commerce decades before Patent lawfare would impede if not terminate crypto startups. The provisional patents in most cases were frivolous but allowed for patent lawsuits to be filed to ‘grind’ the upstart startups into the ground through insurmountable legal expense creating uncertainty in the process.
3. The lobbying of the Federal Reserve to somehow use its influence to centralize this decentralized enigma.
4. The advent of inserting credit and payment cards as unnecessary intermediaries (middlemen) into crypto transactions.
Cryptocurrency, if allowed to develop on its own, will end the banking system in the world. Governments still have crypto accounts they can inspect and transaction reports to examine but the banking industry is left out in the cold and they just can’t have that.
If you like your doctor, you can keep your doctor.
Cryptocurrency, if allowed to develop on its own, will end the banking system.
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Disagree. It will transform the banking system, but not end it. This report we’re looking at here that MasterCard is delving into cryptocurrencies is proof positive that traditional banking is paying attention to a new financial world order.
Banks as well as governments will adopt and evolve as necessary.
> “This report we’re looking at here that MasterCard is delving into cryptocurrencies is proof positive that traditional banking is paying attention to a new financial world order.”
They will try to have a role but they have no absolute control because they are unnecessary. Consumers don’t need Mastercard or any centralized banking/clearing network to conduct a cryptocurrency transaction.
As far as Mastercard and their peers are concerned, it’s about grabbing market share as fast as possible but eventually consumers will find they gum up the works.
When consumers abandon the unneeded centralized entities, there will be an effort to ‘regulate’ the market. That effort has already been tried to an extend and failed.
Blockchain is so secure that it’s hard to regulate an industry that doesn’t have regulatory issues. The crypto electronic exchange is about as simple as handing over a 10 dollar bill for a 3 do9llar loaf of bread and getting 7 dollars back. Who needs Wall St. for this?
But Mastercard and their club buddies will try. There’s not a lot they can do to avoid the inevitable historical outcome unless ... Marxism/Fascism by some name.
However, the free commerce history going forward is clear, Mastercard will be the new buggy whip.
They can have fun trying stay relevant in the meantime but I would exit the centralized markets at some point and maybe learn how to make a better pillow.
They left out taxes.
The IRS is very interested in unreported capital gains, both long and short term.
Blockchain is so secure that it’s hard to regulate an industry that doesn’t have regulatory issues. The crypto electronic exchange is about as simple as handing over a 10 dollar bill for a 3 do9llar loaf of bread and getting 7 dollars back. Who needs Wall St. for this?
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Disagree. Certainly a three dollar loaf of bread is a currency standard that people accept and can live with. But with the volatile nature of cryptocurrencies that loaf of bread might cost you $1.95 today or $4.15 tomorrow.
For the foreseeable future cash (the dollar) will still be the norm in day-to-day to day markets.
When I studied history, it was thousands of years of Western Civilization.
You’re looking at the short term.
The historical trend is clear, centralized banking is dead in the future. Wall St can try whatever shenanigans they want, they are behaving like persons drowning trying to hold onto anything that gets them to the surface to breathe.
You won’t recognize the future in ten years but Wall St. isn’t going to be where they think they’re going to be. They will continue the trend toward irrelevancy. As title companies and retirement plans migrate to Blockchain platforms, Wall St. will go under.
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