Alternative Finances

MasterCard Says It is Safer (And Faster) Than Bitcoin

MasterCard is taking its case to the British authorities that bitcoin (and its digital currency brethren) needs additional regulation.

"In the current environment we feel that the risks of digital currencies outweigh the benefits,” the company wrote (in a letter digital currency website Coindesk managed to obtain). The letter was a response to a recent request for information put out by British Treasury authorities.

“We would argue that, when compared to MasterCard’s network, the claims pertaining to the speed and safety of digital currencies [do] not hold up, not least given that on average it takes 10 minutes for a block to be verified and that digital currencies are far more susceptible to hacking attacks,” MC noted in its letter.

The firm further noted that while bitcoin is a “lower cost” form of currency exchange, that is likely because bitcoin is not regulated in the same way its competitors are: “Providers of digital currency services do not currently bear any compliance costs, whereas providers of other forms of electronic payment bear the cost of complying with consumer protection laws and anti-money laundering laws.”

MC further noted, through a spokesperson, that the letter was “developed to help them understand the policy issues around virtual and anonymous currencies.”

Bitcoin is a competitor of MasterCard’s – after a fashion, in the same way a bike competes with a car in a road race – but they make a point worth considering. If traditional FIs that issue credit, make loans and facilitate money transfers have to follow a variety of stringent rules, it is not clear why bitcoin and other startups should get a pass.

To check out what else is HOT in the world of payments, click here.

——————————–

Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

3 Comments

TRENDING RIGHT NOW

To Top