Mastercard Will Accept Cryptos That Have State Backing
Ari Sarkar, Mastercard co-president for the Asia-Pacific region, talked in an interview with Financial the future plans of Mastercard regarding its relationship with cryptocurrency.
He said that the credit company is inclined to deal with cryptocurrency that is backed up by their government. “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],”
While there are many countries that are looking into creating a central bank backed cryptocurrency, such as Canada, China, Dubai, England, Estonia, India, Russia, but the only one to actually launch one is Venezuela, and that action has been met with international criticism.
This is not a change in attitude from last year, when Mastercard CEO Ajay Banga stated that cryptocurrency is “junk” in his interview, also saying that if there were digital currency backed by governments Mastercard would be implicated.
“If the government creates digital currency, we will find a way to be in the game. We will provide rails for moving currency from customer to merchant. The government mandated digital currencies are interesting. Non-government mandated currency is junk.
Sarkar also talked about a pilot program in Japan and Singapore that would allow Bitcoin traders to cash out directly onto their MasterCard. Adding that “The pilot] is a toe in the water, we’re fully cognizant of the reputational risk,” said Banga at that time.
Additional 5% Fee and Interest
Just last month Visa and Mastercard started a wave of criticism when it relabelled transactions that involve cryptocurrencies from “purchases” to “cash advances”. This meant that traders which used their cards had an additional five percent fee from the credit company added to the rest of the fees charged by the exchange.
Along with the added percentage due to the relabelling, traders would also be charged interest when they started their purchase. Some reported that the interest would sometimes pass 20%. But in spite of this, Mastercard is still quite interested in the developing technologies as Sarkar revealed that Mastercard Labs, the credit company’s branch that deals with research, has filed for over 30 patents which involve blockchain technology and cryptocurrency.
MasterCard’s unwavering stance on cryptocurrencies comes as no surprise, as many other banks including Lloyds of London, Australia’s Virgin Money, and U.S.- based Citigroup, have recently banned clients from using credit cards for cryptocurrency transactions.