Mastercard Secures Crypto Patent to Link Fiat Accounts
Mastercard has secured a new patent to link the fiat currency accounts with the cryptocurrency accounts of users to facilitate microtransactions.
Seth Eisen, Mastercard’s senior vice president for communications said that currently, Mastercard users are able to only transaction using the dollar or the fiat currency that the government regards as legal tender. However, the patent filed will let the users use their cryptocurrency accounts to pay for such transactions by taking advantages of increased speed and security that Mastercard can provide.
The reason cryptocurrencies have not taken over the world yet is that the processing and storage capabilities of such currencies are limited. As far as Bitcoin is concerned, it takes approximately 10 minutes for a transaction to get verified and be recorded on the blockchain.
The document published by the U.S Patent and Trademark office states,
“While blockchain currencies can often provide such safety and security for the payer’s information, such security may be limited for payees, particularly due to the limitations of the blockchain.“
This is very clear from the fact that Bitcoin’s transaction speed is about 3-7 TPS (Transactions per second) whereas that of traditional payment systems managed by players like Mastercard and Visa is around 65,000 TPS and can even potentially scale beyond that if required.
According to the document, the blockchain transactions take “a significant amount of time” as the validation depends upon the “payer’s good faith.”
The document added that “many entities, particularly merchants, retailers, service providers, and other purveyors of goods and services, may be wary of accepting blockchain currency for products and participating in blockchain transactions.”
With Mastercard securing as many patents for blockchain and crypto products as possible, Eisen told CNBC,
“We’re consistently looking at ways to bring new thinking and new innovations to market to create value for us and our customers and cardholders. Patent applications are part of that process, taking steps to protect the company’s intellectual property, whether or not the idea ever comes to market.”
The news ignites a positive response from the crypto community, especially bulls like Tom Lee from Fundstrat Global Advisors, who thinks that Mastercard’s move is ” really validating the idea that digital money, or blockchain-based money, is a valid form of transaction.”