Home News Mastercard ‘Open To Using Cryptocurrencies’ But There’s A Catch!

Mastercard ‘Open To Using Cryptocurrencies’ But There’s A Catch!

March 20, 2018 11:43
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Mastercard announced their sudden U-turn about allowing their customers to buy cryptocurrencies. This announcement came just a month after the news broke that the company was making it harder for investors to buy virtual currencies.

The new update states that it will support cryptocurrencies if they are backed by a central government. In a conversation with a news portal, Ari Sarkar, Mastercard co-president for the Asia-Pacific region, said, “So long as it’s backed by a regulator and […] it is not anonymous, it is meeting all the regulatory requirements. I think that would be of greater interest for us to explore.”

Central governments in different countries of the world, such as England, China, Venezuela, Dubai, Israel have announced plans to launch or are already in the process of launching their own cryptocurrencies. To date however, only Venezuela has launched its cryptocurrency, Petro which ran into a lot of legal hot water. Petro saw a short successful pre-sale before being banned by US President Donald Trump.

Sarkar added that Mastercard is running a cryptocurrency pilot program in Singapore and Japan to enable clients to “cash out” of bitcoins on to a card. However, the test is not yet “of scale” as the company has no real idea as to how much bitcoin currently costs.

He said, “We are not operating trading of bitcoin through the MasterCard network. The pilot is a toe in the water, we’re fully cognisant of the reputational risk.” There were strict KYC/AML (know your customer and anti-money laundering) controls.”

Sometime early last month, Mastercard told Investopedia that, “Over the past few weeks, we have clarified to acquirers – the merchant’s bank – the right transaction or merchant category code to use for these type of transactions (cryptocurrency purchases). This provides a consistent view of such purchases for both merchants and issuers.”

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