MasterCard announced that this year 2021, it will support certain cryptocurrencies directly on its network; it will be a change that will bring in the environment of cryptocurrencies and their dissemination.
MasterCard and its patents for digital currencies
Currently, the company has initiated contacts with some central banks that want to create their own digital currencies. The announcement of supporting some cryptocurrencies caused surprise in the global market. MasterCard, at this time, has approved 90 technological patents related to the blockchain network.
Changes in the payment market as a result of the pandemic
At the Latin America level, there have been notable changes, such as the growth of electronic commerce, which was thought to take five years, which was achieved in 7 months. The use of debit cards at points of sale also increased.
Progress on the issue of crypto assets
Mastercard is offering central banks the possibility of connecting them to the MasterCard payment network once they have designed their own cryptocurrencies. The first patent dates from 2013, which refers to technology that enables 99% of digital currencies. Similarly, it has the largest number of patents on the blockchain, with 90 approved and over 220 applications in process.
Evolution of the cryptocurrency market
The cryptocurrency market has boomed in recent years. It is grouped into three blocks: the first, of the central digital currencies; the second group, of the “stable” coins issued by the industry, respecting fundamental points such as regulation, stability, and customer protection. And the third block, that of cryptocurrencies (example Bitcoin) that did not enter the second group, since it does not have regulation in all countries and its value fluctuates in a short time.
When will cryptocurrencies be used for purchases?
Central bank digital currencies and stable currencies have the required attributes to be used as a means of purchase. However, for conservatives on the subject, their main question is how traditional commerce would enable payment with Bitcoin; there are still regulatory challenges in this regard. The issue goes beyond acceptance itself, as Bitcoin is seen more as an investment asset than a purchase instrument, mainly due to its fluctuating prices.
MasterCard currently has a product called CryptoCard, which allows a cryptocurrency wallet provider to have the possibility of changing digital currencies, such as Bitcoin, to traditional currency and being able to use them at points of sale that accept MasterCard.
The patent dilemma within the blockchain environment
Although Mastercard has filed several patents, we must bear in mind that patents often hamper innovation and collaboration (especially in technologies that have great global relevance and are based on decentralization, transparency, and collaboration). For example, while Mastercard accumulates patents, there are other companies in the field that are part of organizations and alliances that seek to encourage the development of new technologies, a clear example of this is COPA (Cryptocurrency Open Patent Alliance) or Blockchain / Cryptocurrency Patent Alliance, which aims for companies to share their patents and not sue each other, to strengthen the industry, encourage the development of new technologies and face traditional banking.
What do you think about this topic? Do you think MasterCard patents incentivize innovation or decentralization?
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