Ajaypal Banga – current MasterCard CEO – branded cryptocurrencies as “junk” at a lecture earlier this week. While we are used to these sorts of comments coming from Visa COO Vasant Prabhu – Prabhu claims that Bitcoin is used by “every crook and dirty politician” – it’s unusual to hear them coming from someone at MasterCard. On July 14th, MasterCard suffered from a service outage and the cryptosphere had a field day. Some users mentioned that Bitcoin has a 99.7% uptime and others suggested they partner with Ripple to prevent outages.
Could these comments have upset the MasterCard CEO and provoked him to lash out at the crypto world? The answer to that question might be yes.
Banga Echoes India’s Sentiments
Ajaypal Banga was born in Pune, India during 1960. Currently India is going through a phase of crypto hate and is banning crypto trading. India has a deep history of mistrust in new technology and seeks to oppose it in every way possible. The MasterCard CEO was giving a lecture in the Indian embassy to an Indian audience, meaning there is a high probability his lecture and comments were designed to captivate the audience. Additionally, in his lecture he went on to bash fiat cash and suggested that all transactions should be done electronically – surprise, surprise – with a MasterCard. In a country that largely only accepts cash, MasterCard would benefit hugely in mass adoption of electronic payments.
MasterCard is Embracing Blockchain and Crypto
Interestingly, on July 19th MasterCard won a patent to speed up crypto payments. While the proposed system still feels very centralized, as it simply runs crypto payments over the same channels as fiat payments, MasterCard is still moving forwards to embrace crypto payments. In addition to its new patent, back in May Martina Hund-Mejean (Mastercard CFO) revealed that MasterCard has witnessed a 2% drop in growth due to less people funding their crypto wallets with their MasterCards. This implies that MasterCard relies fairly heavily on the crypto industry if a slight lull in the market cuts 2% of its growth.
Electronic Payments Paired with Blockchain is the Future
American Express (Amex) has already teamed up with Ripple to speed up its cross-border B2B payments in a trial that has exceeded expectations. In addition to this, Amex won a patent for a new Proof-of-Payment blockchain protocol. The possibilities of this new protocol are game changing and could make Amex the stand out choice of card provider for banks and consumers alike.
Electronic payment companies need to start embracing blockchain, as it’s undeniably the future. Hitachi are working on a blockchain implementation to allow people to pay using only their fingerprint. If MasterCard and Visa continue to oppose blockchain and stand against it, they could get swept aside and be consigned to the past.