Finance

Mastercard Intends to Centralize Cryptocurrency System

They Criticized Bitcoin's Waiting Times

It looks like cryptos are about to be “bankized” with Mastercard filing a patent regarding the application of fractional reserve banking to crypto payments.

Mastercard Considering Crypto-Finance

According to the report posted by the USPTO, Mastercard intends to introduce a unique method of payment processing that will allow crypto and fiat payments for not only merchants but retailers as well. Moreover, it will also include facilities to store both currencies.

According to the report “there is a need to improve on the storage and processing of transactions that utilize blockchain currencies. Existing payment networks and payment processing systems that utilize fiat currency are specially designed and configured to store and protect consumer and merchant information and credentials safely and to transmit sensitive data between computing systems.”

The company intends to use cryptos to manage its “fractional reserves.” It’s a banking practice that involves keeping only a fraction of the ‘balance’ in the form of actual cash.

The Plan is Ready

According to the latest reports, the company is planning to use a “specially designed” system to provide users the benefits associated with a “decentralized blockchain” while protecting their information to reduce the risk of theft and frauds.

The report said:

“This may reduce the risk of theft of the consumer’s blockchain currency by trusting the data to financial institutions and payment networks that already specialize in the storage of sensitive financial information.”

The company also plans on linking all blockchain transactions to a specifically designed corresponding digital framework that will be used to store the identities of senders and receivers. Plus, the system will also assess each transaction to ensure it’s approved and creditworthy.

The system will work quite like cryptos and the merchants will be able to accept both currencies with the same device.

Mastercard Criticizes Bitcoin

The company also criticized Bitcoin’s for its “ten minute wait time.” The patent has also surprised experts as it appears to go against the basic concept of cryptos, which were designed to remove fractional reserve banking.

The company appears to be high on blockchain but not all of the cryptos. It believes that its platform will not only help save time but also make transactions safer. However, we’re not sure how others are going to react to it.

Related post:

Bank of America Produced and Patented Cryptographic Key Offline Storage

Michael Wight

Michael is a freelance writer with special interest in finance and technology. He regularly trades cryptocurrencies and loves to share his knowledge with others.

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