Almost a month ago Mastercard announced that in 2021 its network will be supporting some types of cryptos. Even though the company has not yet stated which cryptocurrency types will be included, it has already presented its requirements. This move is another demonstration of cryptocurrency legitimation.
Reasons behind the initiative
During a certain period of time Mastercard had examined the relation of customer usage to cryptocurrencies, especially Bitcoin. This research showed that consumers use their Mastercard debit cards to buy crypto assets as well as begin using crypto cards on the Mastercard network.
Once the company makes cryptocurrencies more accepted as a method of investing and paying, the whole process of digital currency transactions will become simpler for the users.
Obstacles on the way
The company claims that Mastercard users will be able to start crypto transactions on the network in 2021. Meanwhile, there are still certain obstacles on the way to this promise.
Some experts have noted that requirements presented by Mastercard are questionable: can they be feasible to implement? Four key items Mastercard expects from cryptocurrencies supported by its network:
- Consumer protections – privacy, security of consumers’ information, transaction data;
- Compliance protocols in order to be able to expose enable activities;
- Following local laws and regional regulations as well as anti-money laundering laws;
- Stability that is necessary for spending purposes.
Additionally, Mastercard requires cryptocurrencies to allow all stakeholders (including merchants, financial institutions, mobile network operators) to contribute to and benefit from their blockchain networks.
Ars Technica’s report expresses doubts about any cryptocurrencies being able to meet these conditions. Moreover, such elements of the regulatory environment can challenge the decentralized nature of digital currencies.
Although Mastercard did not yet share the information about which assets will be added to the network, this initiative, without doubt, contributes to the higher legitimization of crypto asset use. It would be valuable to mention that currently other influential companies such as Tesla, Venmo, or BNY Mellon also spoke of their intentions to make Bitcoin a part of their business offerings.
COREDO’s specialists keep their hand on the pulse of the cryptocurrency world. We would be happy to be your information source about this sector as well as provide individual consultations on the subject.