In a new video, Matthew Driver, MasterCard’s president for South East Asia, issued a strong rebuke of digital currencies like bitcoin, suggesting that cryptocurrencies carry too many risks to be successful.
Noting that MasterCard is “not completely comfortable with the idea of cryptocurrencies”, Driver used to video as a platform to blast the technology as “against the whole principle” on which the credit card giant has established its business.
Driver argued that bitcoin’s design makes it difficult for individuals to both trust that their transactions are safe and have faith in the system at large. He asserted that the ability for individuals to “guarantee [their] anonymity” by using digital currencies is especially troubling, a notable comment given that bitcoin has long been recognized as a pseudonymous network.
“Trust and security, a stable form of value, are incredibly critical if you’re going to be able to gain acceptance for the services you’re looking to provide. The challenge for cryptocurrencies, like bitcoin, is that they’re unstable in terms of their intrinsic value.”
The payments exec went on to use the video, hosted by Singapore-based Channel NewsAsia, as an opportunity to tout MasterCard’s services over both bitcoin and cash, stating that his company believes in “moving to a world beyond cash and ensuring greater transparency and security and simplicity to the way people live their lives”.
The video notably follows MasterCard’s most recent testimony on the subject of bitcoin, a document submitted to the Australian Senate Standing Committee on Economics that called for the application of payment standards that include guarantees on network usage.
‘Purpose not entirely clear’
According to Driver, one of the main issues with digital currencies like bitcoin is that users lack safety nets should they run afoul of fraud.
“[Cryptocurrencies] don’t offer, perhaps, the recourse that consumers are naturally expecting that come from using cash in the day-to-day,” he said.
Driver argued that cryptocurrencies “serve a purpose that’s not necessarily completely clear”, and specifically took aim at bitcoin mining – the process by which a distributed network of computers process transactions – stating:
“Trust is a critical component of any payment system. So, if you think about the idea that, all of a sudden you have cryptocurrencies being manufactured, if you like, on an anonymous computer in an anonymous location, it’s completely legitimate to have some legitimate concerns about how its working.”
Driver said that regulators want fully compliant payment systems that have clear-cut information on those involved, though the MasterCard executive did not acknowledge that, as of today, as much as 77% of the bitcoin mining network has been traced to a known entity or mining address, according to Blockchain.info.
At the close of the video, Driver returned to the subject of anonymity, stating that “if it’s an anonymous transaction, that sounds like an suspicious transaction”.
“Why does someone need to be anonymous?” he asked.
The full video can be found below: