Indian Internet ‘Blockchain Committee’ Attracts Reps From Zebpay, MasterCard, Microsoft

The Internet and Mobile Association of India (IAMAI) is forming a dedicated focus group for blockchain exploration made up of both big business and cryptocurrency players, Indian daily newspaper Economic Times reported Monday, Oct. 15.

Confirmed in a tweet Tuesday, the IAMAI, whose remit is to “expand and enhance” the online and mobile sector, will use its “Blockchain Committee” to “identify opportunities and challenges and work with government, industry and startups” to develop a blockchain “ecosystem.”

The move comes amid testing times for cryptocurrency in India, with the country’s supreme court still deliberating on the legality of the Reserve Bank of India’s (RBI) cryptocurrency banking ban it instigated in July.

Commenting on the plans, Tina Singh, chair of the newly-founded Blockchain Committee, said the technology was nonetheless “undoubtedly the technology of the future,” noting:

“The IAMAI Blockchain Committee will focus on creating dialogue between all stakeholders; curate and create content to aid skill development and move towards creating a participative economy with the usage of blockchain.”

Participants in the committee include major Indian cryptocurrency exchange ZebPay, itself a conspicuous victim of the central bank’s ban, having halted its exchange offering altogether late last month.

Other parties include representatives from MasterCard, Microsoft and IBM.

The RBI itself is also “researching” blockchain, sources reported in August, as part of an assessment process in which it would “check what can be adopted and what cannot.”

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Mastercard CEO Calls Crypto “Junk” for Lack of Transparency and Stability

The president and CEO of Mastercard has called cryptocurrencies “junk,” arguing that they don’t deserve to be considered as a medium of exchange.

Ajay Banga was making his comments at the New India Lecture organized by the Indian Consulate in New York in partnership with the U.S.-India Strategic Partnership Forum (USISPF). His remarks come after the news that Mastercard secured a potentially game-changing digital currency patent capable of allowing virtual and fiat currency transactions on the same network.

Mastercard CEO Ajay Banga Slams Cryptocurrencies for Popularity Among Criminals

Banga’s depreciative opinion in regard to cryptocurrencies is based on the sea of illegal transactions – 95 percent – made with this kind of asset on the dark web, where child prostitution and drugs are commercialized, as well as stolen identities and credit cards.

His speech also tackled the massive market volatility, which is not a recommended attribute as a means of payment, reports Money Control.

“I think cryptocurrency is junk. The idea of an anonymized currency produced by people who have to mine it, the value of which can fluctuate wildly – that to me is not the way that any medium of exchange deserves to be considered as a medium of exchange.”

Predictability and transparency are two key criteria for any currency to be accepted by the people and businesses as a currency, according to Banga, who seems baffled by the hype surrounding the digital currency market. “Why is that the medium of exchange that is being preferred”, he added.

He pointed to a recent indictment of 12 Russian intelligence operatives for interring in the U.S. elections, who are said to have used Bitcoin. “Why civil society would like to put a snake in its backyard and think that somehow the snake will only bite my neighbor, I don’t get it.”

Banga’s comments come days after news that Mastercard is looking to bridge the gap between fiat currencies and cryptocurrencies with a hybrid system. This would incorporate virtual currencies, but allow them to be transacted on traditional payment channels.

The leading global payments and technology company has filed for a patent arguing that its “payment networks may be able to evaluate the likelihood of fraud and assess risk for blockchain transactions using existing fraud and risk algorithms and information that is available to payment networks, such as historical fiat and blockchain transaction data, credit bureau data, demographic information, etc., that is unavailable for use in blockchain networks.”

As Mastercard’s recently filed patents are focused on fighting fake identities, it is not surprising that Banga blasted at cryptocurrencies precisely on the issue of fraud.

Featured image from Shutterstock.

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Mastercard CEO Calls Anonymous Cryptocurrencies 'Junk,’ Again

Ajaypal Banga, the CEO of Mastercard, blasted cryptocurrencies during the “New India Lecture” at the Indian Consulate earlier this week, The Times of India reports Thursday, July 26. Banga described anonymous, non-state-issued cryptocurrencies as “junk,” because their prices can fluctuate “wildly” and thus they do not “deserve” to be considered a medium of exchange.

Speaking at a series of lectures hosted by the Indian Consulate in partnership with the U.S.-India Strategic Partnership Forum (USISPF), the India-born CEO and president of the multinational financial services giant Mastercard reportedly said the following:

“I think cryptocurrency is junk….The idea of an anonymized currency produced by people who have to mine it, the value of which can fluctuate wildly –– that to me is not the way that any medium of exchange deserves to be considered as a medium of exchange.”

This isn’t the first time that Ajaypal Banga refers to cryptocurrencies as “junk,” as he had already made the same evaluation in October of last year, lashing out at all digital currencies that are not “government mandated.”

Continuing on the topic of anonymity, Banga referred to the recent indictment by the U.S. Department of Justice (DoJ) of 12 Russian officials for allegedly using cryptocurrencies like Bitcoin (BTC) to fund “interference” in the country’s 2016 presidential elections. According to Mastercard’s CEO, the Russian intelligence officers chose Bitcoin because of the anonymity it offers:

“Why civil society would like to put a snake in its backyard and think that somehow the snake will only bite my neighbor, I don’t get it.”

According to The Times of India, Banga also appeared concerned by the statistic that 95 percent of all illegal transactions on the dark web marketplaces are conducted with the use of cryptocurrency.

While potentially as much as 44 percent of all Bitcoin transactions are associated with illegal activity, the “vast majority” of illicit purchases are still made with the more traditional tools, such as cash, according to a Cointelegraph report from March this year.

Despite Mastercard CEO’s negative stance on cryptocurrencies, the company appears interested in their underlying blockchain technology, having filed a number of patents in the past year that make use of the tech for payments.

In May of this year, Mastercard reported a drop in its quarterly growth due to a decline in the number of people who use its cards to purchase cryptocurrencies.

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Mastercard Patents a Method to Manage Cryptocurrency “Fractional Reserves”

Technology

Mastercard has patented a method to manage cryptocurrency “fractional reserves”. The big idea behind it seems to be that users will be able to pay with fiat on credit cards partly backed by crypto assets using a centralized system offering faster transaction conformation speeds.

Also Read: IBM Backs the Development of Latest New Stablecoin, Stronghold USD

Cryptocurrency “Fractional Reserves”

Mastercard Patents a Method to Manage Cryptocurrency "Fractional Reserves”Credit card giant Mastercard (NYSE: MA) was granted a patent for a “Method and system for linkage of blockchain-based assets to fiat currency accounts.” A disclosure from the US Patent and Trademark Office explains it relates specifically to the use of centralized accounts to manage fractional reserves of fiat and blockchain currency updated via transaction messages corresponding to fiat- and blockchain-based payment transactions.

Explaining the need for the patent, the document states that, “blockchain currencies have seen increased usage over traditional fiat currencies by consumers who value anonymity and security. Cryptocurrencies offer consumers a currency that is decentralized and relatively anonymous and secure in its use.” And, such transactions “may be highly desirable for consumers that wish to maintain their privacy, and may help reduce the likelihood of fraud due to theft of their information.”

However, “it often takes a significant amount of time, around ten minutes, for a blockchain-based transaction to be processed, due to the computer processing time and resources required to verify and update the blockchain.” In addition, “it can be difficult for consumers to adopt, or even understand, blockchain currencies,” and if a “wallet is lost, discarded, or stolen, the associated currency often cannot be recovered by the rightful owner.” Thus it concludes that, “there is a need to improve on the storage and processing of transactions that utilize blockchain currencies.”

Mastercard to Really Incorporate Crypto?

Mastercard Patents a Method to Manage Cryptocurrency "Fractional Reserves”Mastercard has already acquired a lot of cryptocurrency-related patents before this. However, it does not seem to be planning to utilize the technology as no actual product or service have been developed. Asked about this, Mastercard senior vice president Seth Eisen explained to CNBC that, “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.”

In fact, reports from earlier this year indicated that the company would only agree to facilitate fully-regulated, central bank-issued, non-anonymous coins. “If governments look to create national digital currency we’d be very happy to look at those in a more favorable way,” Ari Sarker, co-president of Mastercard’s Asia-Pacific business, said back in March. “So long as it’s backed by a regulator and the value …it is not anonymous, it is meeting all the regulatory requirements, I think that would be of greater interest for us to explore.”

Is Mastercard really looking to become part of the cryptocurrency ecosystem or is it just hoarding patents for future legal battles? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


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