Mastercard is Open to the Use of Cryptocurrencies Issued by Central Banks
A senior executive has said that Mastercard is ‘very happy to look at’ the use of cryptocurrencies that have been issued by central banks, according to a report.
Ari Sarker, co-president of Mastercard’s Asia-Pacific business, said to the Financial Times, that:
If governments look to create national digital currency we’d be very happy to look at those in a more favourable way [compared with existing cryptocurrencies]. 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.
Early last month, Mastercard and Visa started making it harder for customers to purchase cryptocurrencies such as bitcoin. At the time, it was reported that both issuers had reclassified how digital currency transactions are processed on their networks.
It was claimed that Coinbase transactions, and presumably other exchanges as well, were being renamed as ‘cash advance’ rather than ‘purchase.’ As a result, using a credit card saw fees, as much as five percent, added by the merchant in addition to the four percent card transaction fee that Coinbase charges.
Now, though, it appears as though Mastercard is undertaking a pilot test permitting customers to cash out of bitcoin on a Mastercard. This, however, doesn’t mean that the company is operating trading of bitcoin through the network, Sarker clarified, rather that it’s dipping its ‘toe in the water’ to see what happens.
Even though it’s not ‘of scale’ yet, the pilot of currently running in Singapore and Japan.
As of yet there doesn’t appear to be any cryptocurrency coins issued by a central bank in circulation. There has, however, been talk of creating ones, namely with the Bank of England and the Bank of Canada. Notably, despite talks on the merits of establishing a government-backed coin, nothing has come of it.
One country, however, that does appear to be on track to establishing its own digital currency is Russia. In an announcement in January, the Russian Association of Cryptocurrency and Blockchain (RACIB) revealed that the much discussed state-issued digital currency, known as the CryptoRuble, will be launched in the middle of July, 2019.
Previously known as the Bitruble, the Russian government has been going backwards and forwards over the possibility of launching its own cryptocurrency since 2015. However, if such a coin does make it into the mainstream Mastercard may find itself providing this currency to its users.
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