MasterCard has forged new means of combining the use of cryptocurrency and fiat. MasterCard who was a strong critic to cryptocurrency and the blockchain is looking forward to using this new service, which will cut across different financial services
The recent turbulence triggered by the blockchain technology and cryptocurrencies in the financial market has made various banking institutions including payment-processing agents such as MasterCard become envious. The reason is simple as the blockchain and cryptocurrencies are upsetting both the status quo and mode of operation of the traditional financial institutions. Previously, MasterCard was an ardent criticizer of the blockchain and cryptocurrencies. MasterCard in time past refused to accept the potential of the blockchain in the financial industry with the CEO referring to cryptocurrencies as junk.
The Tide has turned around
Nevertheless, in spite of the various criticism and shots fired from different ends, cryptocurrencies have been able to infiltrate the mainstream financial market. Therefore, neglecting it totally wasn’t an option to consider for MasterCard. Actually, MasterCard has been filing numerous patents in this space.
In its latest filing, it shows that MasterCard is working on Fractional Reserve Banking for cryptocurrencies. The patent document, which was revealed, expounded that MasterCard is in partnership with “blockchain currencies” by utilizing a new system that involves immediate fiat and crypto storage. The platform to be specific will function like a web wallet having a combination of fiat and crypto.
The document indicated the company is ready to apply the models of fiat banking systems to cryptocurrency storage. Alternatively, its previous processing systems and payment works for fiat currencies were planned to securely store and safeguard its client’s data and credentials. It will further transfer delicate information among its computing systems.
Additionally, the current payment systems configuration has the capacity of handling fraud algorithm applications, risk assessment, and difficult calculations very fast.
The document further states that, “Accordingly, the use of traditional payment networks and payment systems technologies in combination with blockchain currencies may provide consumers and merchants the benefits of the decentralized blockchain while still maintaining the security of account information and provide a strong defense against fraud and theft.”
Benefits of Using Traditional and Crypto Technologies – MasterCard
MasterCard has indicated that the combination of traditional and cryptocurrencies technology comes with different benefits. The company noted that this new system would come with its own confirmed and robust payment network and products. According to the company,
“Transactions that may be performed via a payment network may include product or service purchases, credit purchases, debit transactions, fund transfers, account withdrawals, etc. Payment networks may be configured to perform transactions via cash-substitutes, which may include payment cards, letters of credit, checks, transaction accounts, etc.”
Nevertheless, it is important to clarify that this latest patent identifies the method of getting crypto payments into the mainstream. Nowadays, cryptocurrencies are used as investment tools and assets. Additionally, this won’t be the first time the company is filling patents in the blockchain and crypto space. If you recall, it got a patent earlier last year for dropping cryptocurrency transactions times. In September, MasterCard spoke of taking advantage of the blockchain technology to its maximum potential.