Several factors have been influential behind increasing the popularity of Cryptocurrencies in recent times, amongst all of these factors one particular feature stands out from the rest-its anonymity factor. Also, the fact that there is no involvement from governmentswhatsoever makes them quite the appealing alternative to fiats.
Givens its growing popularity. one of the world’s largest credit card firm has finally come out tosupport the cryptocurrency world, but there is a huge contingency to it.
As per a report from Financial times, it has been seen that Mastercard has been slightly on the back-foot and are open to the idea of welcoming cryptocurrencies into its platform, provided that the coins are issued by central banks.Mastercard has previously stated that purchasing cryptocurrency via its cards shall be acknowledged as a cash advance rather than a purchase. Meaning the difference would be a higher rate of interest to consumers, and is one of the reasons affecting the markets leading it to be extremely instable.
Although this step is completely opposite of why Cryptocurrencies have been launched . Bitcoin was developed back in 2009 triggered by a severe economic downturn. The ingenious abilities of cryptocurrencies presents itself as an option which cannot be subjected to the pitfalls of government-backed currencies, the values of which can fluctuate almostin the wink of an eye. Provided that a country requires more cash flow, it doesnt hesitate in printing more money. But it has a huge after effect on its own economy asit weakens the currency’s—and the entire economy’s—value over the long period of time.
Currently tests have been conducted in Japan and Singapore that permits customers to exchange their crypto directly into fiat on their cards by the world’s second-largest credit card enterprise. They have also apparantelyhired Know Your Customer (KYC) controls for ensuring that the funds are not utilized for illegal purposed like money laundering or other fraudulent activities. Mastercard look at this move as a way of getting into the crypto game without interfering or clashing with the financial regulators.
It has already been noticed that one European country has already proceeded furtherin developing its own version of cryptocurrency, well sort of a crypto. Earlier in the year it was announced by Sweden that theRiksbank, Its national bank, would possibly be launching the e-Krona by 2020.They also revealed thatthe new money would not be printed, but, as a matter of fact, stored by the user on an app or a card configured to a central database to register the funds. While Riksbank are terming it to be some sort of a cryptocurrency, it’s actually nothing more than a paper-less currency.