Bringing cryptocurrencies closer to the global banking and finance system could help in the better adoption of these assets. As per CNBC, a new patent awarded to MasterCard could assist in bridging the gap between these two entirely distinctive systems. The patent could help the company manage “fractional reserves of blockchain currency.” In a striking first, the credit card giant could introduce products that could speed up blockchain transactions via credit cards, further validating their use as alternative currencies.
A Bitcoin MasterCard Could Be in the Making
Consumers may be hoping to, one day, get their hands on a credit card that accepts Bitcoin as a currency and lets users transact just like fiat. MasterCard won a patent to bring “fractional reserves of blockchain currency” to life. In a document published by the US Patent and Trademark Office, the company noted that customers “value anonymity and security,” which leads to increased usage in the use of blockchain-based assets.
Seth Eisen, senior vice president for communications at MasterCard, said that at present, MasterCard users can only pay for goods and services using legal tender.
However, the document notes that the use of digital currencies come with challenges, and there is a need to make processing capability better and improve storage options as well. It further states that the limitations of the blockchain pay offer limited security for the payee. The document cites slow speeds on the network as an example. While traditional payments can occur within nanoseconds, Bitcoin payments may still take a little over 10 minutes. The merchant will have to depend on “payer’s good faith” as it takes time to process a transaction.
As the transactions remain anonymous, the merchant will always be at a disadvantage. If the issues are addressed, then blockchain assets could become useful. Otherwise, both parties involved in the transaction would have to wait a long time, and the payee would specifically be at risk.
Can Credit Cards Help Make Crypto Transactions Faster?
When and how crypto payments could be brought to credit cards is still unclear. However, if this method is ever brought to market, it could help enhance blockchain transactions. Users will be able to pay in both fiat and digital currencies easily.
Eisen did not clarify if the company is developing the product for real. In an email to CNBC, he vaguely described the patent as a step to protect the intellectual property of the company “whether or not the idea ever comes to market.”