Mastercard vs bitcoin

Mastercard has launched cryptocurrency-linked payments cards in the Asia-Pacific region that will allow holders to instantly convert their digital assets into fiat currency for the first time, the company announced on Monday. The cards seek to remove any barrier between merchants who do not accept digital assets as payment and customers who want to pay in crypto. The partnership with Hong Kong's Amber Group, Thailand's Bitkub, and Australia's CoinJar will allow consumers and businesses in the region to apply for crypto-linked credit, debit, or pre-paid cards, which can be spent anywhere Mastercard is accepted. The three firms will also join Mastercard's global Crypto Card Program to become the first Asia Pacific-based digital asset service providers on the roster. The program is aimed at making crypto transactions as seamless as possible.



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Mastercard said on Wednesday that it is planning to support cryptocurrencies natively on its network. If this actually happens, it will be a big deal, helping to further legitimize virtual currencies and dramatically expand the market for their use. However, Mastercard says that it's only going to support cryptocurrencies that meet a number of requirements—including stability, privacy, and compliance with money laundering laws.

The problem is that few cryptocurrencies meet Mastercard's criteria. Indeed, it's not clear if any of them do. Bitcoin, the first cryptocurrency, was designed to disrupt the power of governments and conventional financial institutions.

The bitcoin network has a decentralized architecture that puts it beyond the reach of any government. Without government backing, bitcoin's price is highly volatile. Users have no recourse against funds lost to hacking or fraud.

The bitcoin network doesn't comply with anti-money laundering laws that conventional financial networks must follow—though some bitcoin intermediaries do. For bitcoin purists, these are points in bitcoin's favor. They believe that bitcoin's open architecture and lack of red tape makes it a fertile platform for innovation and a check on the power of governments.

But these same characteristics make the network a nightmare for financial institutions that do need to offer consumer protections and comply with money laundering laws. This exact tension has hobbled Facebook's ambitious Libra project—which has since been rebranded Diem. In its early months, Libra's leaders tried to have it both ways. On the one hand, they said that the Libra network would be open and decentralized like bitcoin though they admitted full decentralization would take a while.

On the other hand, they said that the Libra network would fully comply with regulations that govern conventional financial networks. But the Libra Association was never able to explain how this would work. For example, if Libra is an open network where anyone can participate, then who will enforce know-your-customer rules that require customers to identify themselves before using the network?

If no one is in charge of the network, who will block transactions that authorities identify as belonging to terrorists or drug dealers? Libra struggled to answer these questions, and it's not clear that they can be answered. Creating a decentralized blockchain network that complies with these rules may not even be possible.

Mastercard pulled out of the Libra Association in as Libra struggled to answer questions like these from regulators.

Shortly afterward, Mastercard released its own list of principles for blockchain partnerships. Mastercard said it was only interested in dealing with cryptocurrencies that "operate in full compliance with all applicable laws and regulations, including those applicable to anti-money laundering.

Now Mastercard says that it is planning to begin supporting some cryptocurrencies natively. Some companies already issue payment cards that allow customers to make payments over the Mastercard network using their bitcoin holdings.

But currently, these bitcoin payments are converted to dollars—or another conventional currency—before they are transmitted across the Mastercard network. If the recipient wants to receive the payment in bitcoins, they must convert the dollars back to bitcoins, paying an extra fee for the service. Mastercard says that by the end of the year, customers will be able to do this natively for some cryptocurrencies.

The recipient will get the same digital asset the sender sent, without the need to convert to dollars and back. However, it seems unlikely that bitcoin will make the cut, as the digital currency flunks several of Mastercard's criteria. For example, bitcoin's public ledger may not meet Mastercard's criteria for customer privacy. Mastercard says that "these digital assets must follow local laws and regulations in the regions they are used"—something bitcoin doesn't do in much of the world.

Eligible cryptocurrencies "will need to offer the stability people need in a vehicle for spending, not investment. The same analysis applies to a lot of other leading cryptocurrencies like ether, litecoin, and dogecoin.

Their values fluctuate wildly, and they are too decentralized to meaningfully enforce money laundering rules. The leading stablecoin, called tether, has shown a track record of stable value. But tether doesn't seem any better on the other criteria. For example, experts have long raised questions about the solvency of the company behind tether. So what could Mastercard be thinking? Few cryptocurrencies out there have been specifically designed for this purpose.

Perhaps the best known is USDC, which is currently the second most popular dollar-based stablecoin after tether. The USDC network won't be fully open like a conventional cryptocurrency network.

Rather, Circle will allow a limited number of financial institutions to issue USDC tokens, and these institutions in turn can grant customers access after verifying their identity. This in turn enables the network to enforce anti-money-laundering laws. So some industry insiders expect USDC to be the first cryptocurrency supported on the Mastercard network. There may not be that many others that fit Mastercard's criteria. The big question, then, is how many people actually want to make USDC-denominated payments over the Mastercard network.

If you want to send someone a dollar over the Mastercard network, you can just send a dollar. Or if you want to send someone a USDC token, you can do that natively on a blockchain network. Still, the ubiquity of the Mastercard network may make this an appealing option for some people who don't have access to specialized cryptocurrency exchanges.

We'll have to see what Mastercard actually does and how the market responds. You must login or create an account to comment. Skip to main content Enlarge. My guess is that this is still about Libra, mostly. MC left for a very clear set of reasons, and it is setting out its terms.

Facebook can either accept them, or try to build its own global payment network. Good luck with that. The money laundering condition by itself rules out bitcoin, probably forever. ZhanMing wrote:. Let me get this straight. This is where many get lost. Crypto makes final settlement near instant. When you use PayPal or cards you aren't sending anything. Lots of jumbling goes on behind the scenes and there's a degree of credit risk.

Money is a technology. It always has been. This is an upgrade for the modern internet connected world we now live in and the hate is really misguided. LuDux wrote:. Whilst no current cryptocurrency matches MC's criteria, I like the idea that there's now a pretty clear set of criteria that outlines what the financial world would consider a "real" currency.

Can't wait to see the designs people come up with in the race to be the first "useful" cryptocurrency. Timothy B. Lee Timothy is a senior reporter covering tech policy, blockchain technologies and the future of transportation. He lives in Washington DC. Email timothy. Channel Ars Technica.



Mastercard, Visa take rivalry to crypto

Bitcoin now processes more dollar value than PayPal and could soon outdo Mastercard. Source: Getty Images. By Dashveenjit Kaur 2 December, Just 12 years into its existence, the Bitcoin network today already processes more dollar value than PayPal, a year-old American digital payments company. Impressive as it is, experts reckon that the network could even outstrip credit card giant Mastercard in the number of dollar transactions value processed, as early as Among the three factors that could see the Bitcoin network rise to the level of the two credit card giants in terms of total volume processed according to Blockdata is; the total number of transactions, the average amount of Bitcoin sent per transaction, and the rise of the price of Bitcoin.

But Visa and Mastercard are looking to rapidly facilitate spending crypto at millions of merchants that connect to their networks worldwide.

Visa to approve first Australian card for spending bitcoin

Cryptocurrencies are never far from the headlines these days. While buying and selling cryptos is becoming increasingly mainstream, the opportunities to spend virtual currencies are somewhat limited in comparison due to its volatility. There are, however, a growing number of companies across a plethora of industries - from big tech to airlines - who are embracing cryptocurrencies, allowing customers to use them as an official method of payment for their goods and services. In November, Mastercard said it would allow partners on its network to enable their consumers to buy, sell and hold cryptocurrency using a digital wallet, as well as reward them with digital currencies under their loyalty programmes. The move would allow customers to earn and spend rewards in cryptocurrency rather than loyalty points. The credit card giant will be pairing up with Bakkt Holdings Inc, the digital assets platform founded in by NYSE-owner Intercontinental Exchange, to offer the new crypto services to its customers. The group - which owns properties in Amsterdam, Madrid, Lisbon, and Rome as well as Bali and Phuket - will accept bookings using 40 different tokens, including Bitcoin and Ethereum from July through their partnership with payment platform Coindirect. As of the start of April, the insurance broker behemoth will allow customers in Switzerland to use Bitcoin as a payment option for their bills.


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mastercard vs bitcoin

The trio of partnerships with Amber, Bitkub and CoinJar make it easier for consumers and corporates to spend cryptocurrency on physical or digital Mastercard payment cards. In partnership with Mastercard, three leading cryptocurrency service providers in Asia Pacific will be launching crypto-funded Mastercard payment cards. For the first time, consumers and businesses in the Asia Pacific region will be able to apply for crypto-linked Mastercard credit, debit or pre-paid cards that will enable them to instantly convert their cryptocurrencies into traditional fiat currency, which can be spent everywhere Mastercard is accepted around the world. The three digital asset service providers that Mastercard is partnering with are Amber Group , Bitkub in Thailand, and CoinJar in Australia, all of which offer cryptocurrency purchase and exchange services in their respective domestic markets. While some merchants already accept payments in digital currencies such as Bitcoin or Eth, this form of acceptance is not widespread.

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Bitcoin's biggest players include Tesla, Square, Mastercard

Despite its critics, bitcoin has seen a meteoric rise in as companies have embraced the adoption of digital currencies, prompting them to make their own investments. Below is a FOX Business roundup of bitcoin and the cryptocurrency industry's biggest players:. Square has been involved with the currency for years and its Cash App, a payments service has allowed users to trade it since The app had three million active bitcoin customers in , with a million new users buying the currency for the first time in January, the company said. Over at Dorsey's "other company" -- Twitter -- the social media giant has recently considered paying employees in cryptocurrencies if they prefer that form of payment. Also, the company said that it expects to begin accepting bitcoin as a form of payment for its cars in the "near future. Musk acknowledged that he was a "supporter of bitcoin" when asked about his thoughts on cryptocurrencies during a live-streamed interview on the popular audio chat app Club House on Feb.

At an average $ billion, the bitcoin network transacted $ way in terms of one metric (volume processed) compared to Mastercard.

He is also a member of CMT Association. Bitcoin is a type of currency that uses digital tokens that can be sent electronically from one person to another. Like dollars, Bitcoin can be used to complete everyday transactions, as long as the receiving person or business accepts Bitcoin as a payment method. If you have Bitcoin and want to use it for everyday transactions, you might consider a Bitcoin debit or credit card.


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Most people have a credit card they can use to pay for items they'd rather wait to pay for in full. But some also have Bitcoin at their disposal. Which one should you use if you have both, and when should you use them to maximize your money? Bitcoin was designed for peer-to-peer transactions, which removes all parties except the two making the financial exchange.


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