What is Mastercard’s Cryptocurrency Criteria? That’s not a moot question even though Mastercard has announced it WILL support certain cryptocurrencies that meet its criteria. But what is it the credit card company is after and why is it so important for the future of Bitcoin and other types?
Mastercard’s Criteria Before Supporting Cryptocurrency
Mastercard, as a corporate entity, has made its intentions clear; it offers native support to stablecoins that meet its criteria in a variety of areas including compliance with international law including money laundering statutes.
It does NOT support “investment coins” not tied to actual currency, which means Bitcoin could get left high and dry because the value of Bitcoin is not tied to an actual asset such as currency.
And at the time of this writing, associating a cryptocurrency with actual currency is still considered a “new” approach, so it’s easy to see that the future is going to be fraught with experiments, a mixed bag of successes and failures, etc.
The challenge for both corporate credit card companies and cryptocurrencies? Regulating a completely decentralized industry. So how does Mastercard choose who makes the cut when it comes to supporting cryptocurrency?
The Four Keys To Mastercard Support For Cryptocurrency
Mastercard has four basic requirements for cryptocurrency support. They are as follows:
- Consumer protection must be available at the same level consumers expect from their other cash, checks, and credit cards;
- Strict compliance required for cryptocurrencies. There must be a standard and the standard must be followed.
- The support must be legal with no “grey area” activity or violations of local regulations where transactions are carried out;
- Stability is the most important key. Bitcoin is well-known for its volatility as an investment, and Mastercard requires its cryptocurrency support go only to cryptocurrency that functions AS currency rather than an investment property.
Mastercard has already put its money where its mouth is on this issue–the company has pulled out of the ambitious Facebook project Libra (later rebranded and presented as Diem) that tried to claim simultaneously that it would be decentralized AND fully compliant with financial regulations. Mastercard, apparently, saw no end game there.
The regulatory issue remains the elephant in the room for more widespread adoption of cryptocurrency; time will tell whether companies gravitate toward a riskier decentralized model or go more mainstream by doubling down on compliance.
Joe Wallace is a writer and editor from Illinois. He was an editor and producer for Air Force Television News for 13 years, and has served as Managing Editor for publications including Gearwire.com, and Associate Editor for FHANewsBlog.com. He is also an experienced book and script editor specializing in non-fiction and documentary filmmaking