After MasterCard had revealed their Patent-pending “Fractional Reserve” Banking, cryptographic equipment, said the CEO of VISA, Alfred Kelly, that he looks at cryptographic currencies at present, “certainly” as a threat to his company. With a view to the future however, he added:
If we have to go this route, we will go to him.
Crypto currencies are “no immediate threats” for VISA
Alfred Kelly revealed his vision on Cryptocurrencies, while he spoke with the former Hedge Fund Manager Jim Cramer of CNBC’s Mad Money. Cramer claimed a few months ago, that Bitcoin and crypto-systems, the “sun is gone”.
Cramer, the co-founder of TheStreet, Inc., Kelly asked, first, whether his company is of the view that crypto-currencies pose a threat to the dominance of VISA in the financial world. Kelly replied with the words: “Certainly not in the short to medium term, because I think that [the market must in fact believe] that the cryptographic technology from a product developed into a real means of payment. It also needs a market, so it can be something like a Fiat currency, so that we can feel comfortable.“
Towards the end of the interview, Kelly admitted, however, that Visa intends, as a company, to position itself in the world’s leading financial media. “We want to be in the middle of each cash flow in the world,” said Kelly. His time in the Show, he ended with the following comment: “If we have to go there (crypto-currency), we will go there, but at the Moment it is more of a commodity as a means of payment”.
Change the view
Although Visa rushed in terms of crypto so far on the side line, other companies, such as Crypto.com a pre-paid Visa cards with crypto-currency, presented to the Public. The Hong Kong-based company is preparing to expand sales in other countries.
Marc O’brien, the former head of Visa in the UK and Ireland, seems to be against crypto-enthusiastic currencies, according to a press release: “I am firmly convinced that crypto-currencies will soon be the Mainstream – And we can be pioneers”. O’brien was appointed in may of this year, the CEO of Russian-British crypto-currency Bank Crypterium.
MasterCard strives to be cryptographically secure “Fractional Reserves”
At the beginning of the year MasterCard, the biggest competitor of Visa, a U.S. Patent applied for, which is a “method and System for link of Blockchain based assets with Fiat currency accounts”. The aim of the patent, the principles of “Fractional Reserve Banking” to crypto-currencies was regarded by the proponents of decentralisation as a major threat.
MasterCard received a few months ago a Patent in connection with the Blockchain, although they represent in this matter a more cautious position, as you said, like Visa, that you trust crypto currency and ICOs as a “high risk”.
The company hopes with his patent application – “2018030808092” – from Thursday, the 25. October 2018, the principles of the Fiat banking system, from which you assume that these “have been specially developed for the safe storage and protection of consumer and trader information and access data and configured”. The patent application States: “[…] The use of traditional payment networks and payment systems, in combination with Blockchain currencies can offer consumers and retailers the benefits of the decentralization of the Blockchain and at the same time the security of the account information, ensure strong protection against fraud and theft.”
The concept has been criticized for the use of Fractional Reserve Banking – since there is no proof that a lender has the funds to meet the promised stocks of customers – which is ironic, because Bitcoin itself is already a working solution for this Problem.
Talks on the state of the industry in the year 2018, have been dominated by the growing institutional interest in the sector, but also the technological progress that has been achieved in this time, must not be ignored. With a new Off-Chain solutions for Bitcoin, the introduction of competing block chains in the Mainnet, and the improvements in other established crypto currencies, the crypto industry, in spite of the weak market, still a lot of potential.
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This article was from English into German:
Senior IT Consultant and Crypto Enthusiast always in search of interesting news.