Mastercard, the world’s second-largest payment network, recently announced plans to expand their business and allow transactions using cryptocurrencies by the end of this year. After Raj Dhamodharan, Mastercard’s Executive Vice President for Blockchain & Digital Asset Products highlighted this move in a blog post, the price of Bitcoin hit an all-time high of $48,297.
Some days back, Tesla confirmed that they would accept payments in the form of Bitcoin. Both these companies are major players and any moves by them are sure to disrupt the market.
Mastercard’s interest in cryptocurrencies is not shocking for many. They partnered with Wirex in July 2020 to let people buy, hold and sell cryptocurrencies. But at that time, the transactions didn’t take place on Mastercard’s network.
Benefits For People & Merchants
This move by Mastercard has a lot of potential for people and merchants throughout the world. As an increasing number of people are getting to know about cryptocurrencies, businesses have started realizing that they can earn lots of profits and also increase their reach.
People can also benefit heavily once cryptocurrency becomes the common method for online payments. Theft in online payments is a common occurrence. All of that will end because of the high security that cryptocurrency offers.
Furthermore, doing transactions using cryptocurrencies is not mandatory. It’s a matter of choice. This move by Mastercard will enable people and merchants to choose between the available online payment methods and cryptocurrency.
Mastercard’s Cryptocurrencies Concerns
Although Mastercard has given a green signal for cryptocurrencies to be used as a medium of transaction, there are some concerns that they must address before this massive move by this year’s end. The biggest concern is that many cryptocurrencies in the market are not secure and stable.
There is no chance that Mastercard would let those cryptocurrencies become a medium for transactions on their platform. For that reason, evaluation of cryptocurrencies will be done against the company’s “Principles for Blockchain Partnerships” framework. This framework will ensure that only the cryptocurrencies that tick all the key points will be used as a medium of transaction.
Mastercard claimed that most of today’s cryptocurrencies fail in one way or another. But still, faster processing speeds in major cryptocurrencies like Bitcoin are essential for real-world applications. Currently, Bitcoin transactions take approximately 10 minutes. When we compare it with the available and widely used online payment methods, that is a lot of time.
Will Mastercard’s Cryptocurrencies Move Be Successful?
As the price of Bitcoin hit an all-time high, it is clear that most people use cryptocurrencies as a way of investment. There are many real-world applications that cryptocurrencies can offer. The most significant is the provision to do transactions using cryptocurrencies.
No matter how many moves major companies make in crypto’s favor, there are still people who don’t want to invest or do transactions. The reason for that could be a lack of knowledge or fear because of the highly fluctuating prices of cryptocurrencies.
Even the banks & financial institutions that opposed cryptocurrencies in the past have started to invest heavily in them. We guess it is time to relearn the new ways that finance works in today’s world.
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