The CEO of a multinational spearhead in the finance sector, Mastercard, used the word ‘junk’ to describe the worth of cryptocurrency structure prevalent around the world. Ajay Banga used this term for cryptocurrency in the backdrop of its anonymous nature of operation and all the sudden fluctuations in its market worth.
According to the report published by CNBC, Ajay Banga, the policy maker at one the worlds biggest financial services corporation, was of the view that most of the operations associated with the cryptocurrency world comprise largely of illegal and banned activities. He also implied that more than 95% of the illegal transaction on the banned parts of the internet, like dark web, are done using cryptocurrency. These transactions made in regards to child prostitution, drug and other financial frauds on the dark web are employing platform of cryptocurrency which is shameful for all of us.
He stated that every medium that can perform financial exchanges must not be considered as the only viable medium of exchange. He did not consider this cryptocurrency-based medium of exchange prevalent across the world to deserve this status. He said:
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
Ajay also questioned the anonymity factor of the cryptocurrency platform. He implied that cryptocurrency played a major role in the “alleged” intervention of Russia in the elections of United States. It was implied that the most delicate and important transactions handled by the Russian agents were also done using the cryptocurrency-based platform.
Discussing the viability of this blockchain network of currency, he stated that it can be harmful for anybody entering this world owing to its volatility and anonymity. He stated:
Why civil society would like to put a snake in its backyard and think that somehow the snake will only bite my neighbour, I don’t get it.
Although the CEO stayed too stubborn upon his use of the term junk for cryptocurrency, but when it came to digital currencies mandated and regulated by the government, he seemed to be all in. Ajay implied that Mastercard is fully invested in supporting a digital currency developed and regulated by the central bank on an official level. He said:
If the government creates digital currency, we will find a way to be in the game. We will provide rails for moving currency from customer to merchant. The government mandated digital currencies are interesting. Non-government mandated currency is junk.
This view of supporting state-backed cryptocurrencies is also supported by other stakeholder of Mastercard. Earlier this year, in an interview with the Financial Times, Mastercard Asia-Pacific co-president Ari Sarker stated:
If governments look to create national digital currency we’d be very happy to look at those in a more favorable way [compared with existing decentralized cryptocurrencies].
Talking about cryptocurrencies backed up the central banks, he also stated that:
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.
Although a clear stance antithetical to cryptocurrencies has been shown by the CEO of Mastercard, but still, Mastercard has also been involved heavily in the research and development of blockchain technologies, exploring its beneficial aspects concerning the finance sector.
In a nutshell, while it might seem cryptocurrencies are the future of the finance sector across the world and this industry has a plethora of applications and uses worldwide, it might just not be the best owing to the use of cryptocurrencies in carrying out illegal activities. Anonymity and sudden fluctuations in market value of these cryptocurrencies make them lose their usefulness.
From the suggestions made by the CEO of Mastercard regarding the cryptocurrency world, it can easily be inferred that all that glitters is not gold.