The president and CEO of Mastercard has called cryptocurrencies “junk,” arguing that they don’t deserve to be considered as a medium of exchange.
Ajay Banga was making his comments at the New India Lecture organized by the Indian Consulate in New York in partnership with the U.S.-India Strategic Partnership Forum (USISPF). His remarks come after the news that Mastercard secured a potentially game-changing digital currency patent capable of allowing virtual and fiat currency transactions on the same network.
Mastercard CEO Ajay Banga Slams Cryptocurrencies for Popularity Among Criminals
Banga’s depreciative opinion in regard to cryptocurrencies is based on the sea of illegal transactions – 95 percent – made with this kind of asset on the dark web, where child prostitution and drugs are commercialized, as well as stolen identities and credit cards.
His speech also tackled the massive market volatility, which is not a recommended attribute as a means of payment, reports Money Control.
“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 wildly – that to me is not the way that any medium of exchange deserves to be considered as a medium of exchange.”
Predictability and transparency are two key criteria for any currency to be accepted by the people and businesses as a currency, according to Banga, who seems baffled by the hype surrounding the digital currency market. “Why is that the medium of exchange that is being preferred”, he added.
He pointed to a recent indictment of 12 Russian intelligence operatives for interring in the U.S. elections, who are said to have used Bitcoin. “Why civil society would like to put a snake in its backyard and think that somehow the snake will only bite my neighbor, I don’t get it.”
Banga’s comments come days after news that Mastercard is looking to bridge the gap between fiat currencies and cryptocurrencies with a hybrid system. This would incorporate virtual currencies, but allow them to be transacted on traditional payment channels.
The leading global payments and technology company has filed for a patent arguing that its “payment networks may be able to evaluate the likelihood of fraud and assess risk for blockchain transactions using existing fraud and risk algorithms and information that is available to payment networks, such as historical fiat and blockchain transaction data, credit bureau data, demographic information, etc., that is unavailable for use in blockchain networks.”
As Mastercard’s recently filed patents are focused on fighting fake identities, it is not surprising that Banga blasted at cryptocurrencies precisely on the issue of fraud.
Featured image from Shutterstock.
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