In response to questions about cryptocurrency quoted by the Times of India and other sources, Mastercard CEO Ajaypal “Ajay” Singh Banga proclaimed that he views cryptocurrency as “junk”:
“I think cryptocurrency is junk….The idea of an anonymized currency produced by people who have to mine it, the value of which can fluctuate widely — that to me is not the way that any medium of exchange deserves to be considered as a medium of exchange.”
Cryptocurrency has many flaws, but calling it “junk” seems harsh although it has a long way to go to reach mass adoption and comply with current financial regulations.
Interestingly, Mastercard recently announced that it had won a patent for anonymous blockchain transactions. Many financial institutions are looking for ways to implement blockchain technology, and this recent announcement could be part of an ongoing educational strategy to separate the concept of blockchain from cryptocurrency. At the same time, anonymity is one of Banga’s arguments against cryptocurrency, as reported in the Times of India article:
“Banga also referred to the indictment of 12 Russian intelligence officers for hacking of the Democratic National Committee and interfering in the US elections saying that the FBI had disclosed that the Russian agents handled the most delicate transactions using cryptocurrency Bitcoin. Banga said cryptocurrency was used in such dealings because it is ‘anonymous’.”
A flaw in this argument against cryptocurrency, is that cryptocurrency is not unique for the purpose of paying anonymously for criminal activity. Cash has been used since time immemorial for this purpose. Nonetheless, cryptocurrency still has a lot of maturing to do before financial institutions consider it a reputable currency and payment method.
Overview by Ryan McEndarfer, Editor-in-chief at PaymentsJournal.com