Traditional financial players are forced to keep a close eye on the evolution of blockchain technology. Failing to do so would result in these players being blindsided by the next big thing in the financial sector. MasterCard, one of the leading plastic card issuers in the world, is paying a lot of attention of the blockchain, simply because this technology holds so much promise for the future.
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It is not the first time MasterCard and blockchain technology are mentioned in the same breath. Just a few weeks ago, Mastercard made a strategic investment in Bitcoin startup Digital Currency Group, securing their place in the world of blockchain technology. Missing out on the impact Bitcoin will have on the financial industry would be a major blunder
Not only can the blockchain remove a lot of overhead costs associated with finance as we know it today, but it will also facilitate payments on a global scale. Especially this latter part is of great importance to MasterCard, as they want to keep a firm grip on their position as a global credit card services provider.
It goes without saying the company is extremely interested in the technology that makes Bitcoin tick. However, they are also cautious in their optimism, as there are still a lot of questions that need to be answered before fully embracing the blockchain. In the event of the technology not working out as planned, MasterCard does not want to take any unnecessary risks for the time being.
The main reason MasterCard decided to invest in Digital Currency Group is because the Bitcoin startup has ties to 15 different other companies exploring blockchain technology. Without the right engagement, the startup would be far less appealing to established financial players, even though there is plenty of interest by everyone to see where Bitcoin technology will go next.
Established financial players are hoping they can use Bitcoin technology to remove the hassle associated with transferring money around the world. Especially when it comes to clearing and settlement agencies – such as the ones involved in processing MasterCard transactions – the blockchain could play a major role in making the concept more cost-efficient.
However, before Bitcoin technology can be embraced on a global scale, MasterCard feels there is a growing need for regulation and investment. The R3 consortium is an interesting take on achieving that goal and creates a good opportunity for banks. Separate efforts have far less chance of making this technology succeed.
Source: Business Insider
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