MasterCard has been consistently lobbying its case to the UK government to make strictre regulations for the virtual currency bitcoin and other such digital currencies that are becoming a threat to the global credit card business. Along the way, they are also adapting to the change that the payment industry has been undergoing for some time. Ever since the bitcoins came into existence, the payment industry has been rooting for a paradigm shift that has been ignored until the digital currencies started to become famous.
MasterCard’s Letter to the UK Government
In a strong worded letter by MasterCard to UKL government, they mentioned that the risks involved in bitcoin usage are much higher than the benefits to the community. They are urging the government to look into the functioning of the currency and that there should be stronger regulations monitoring this digital currency.
Financial Companies feeling the pressure
This letter by MasterCard was sent in response to UK Treasury’s call for information last year. It is a clear indication of how well established financial companies are now starting to feel threatened by bitcoin and are now taking these bitcoins more seriously than ever. This is the reason they insist that the digital currency too should fall under the purview of monitoring like every other financial instrument.
What the letter says
As per the letter procured from CoinDesk the MasterCard’s secure network is compared to that of Bitcoin’s blockchain technology which takes 10 minutes to validate each transaction and is open to more severe hacking attacks. On the other hand, MasterCard is much safer and faster that the digital currencies will not be able to match up to.
They also made another sound argument the reason why digital currency transactions are still cheaper because they do not have to bear any compliance costs like consumer protection and anti-money laundering. These complain ace costs are borne by the electronic payment service providers making their transactions costlier but definitely safer thereby protecting the consumer’s transactions from fraud.
A spokesman from MasterCard defended the letter by saying that UK officials need to be apprised of the policy issues surrounding digital currencies and their anonymity.
Even though the claims made by the company are biased, but they do make a fair point. They believe that if the conventional financial systems are bound by global rules to operate in this environment safely then so should virtual currencies if they are competing in the same space.