Cryptocurrencies, in general, will not help for the inclusion of unbanked individuals into payment systems and banks, claims Mastercard CEO Ajay Banga. However, the company is far from ignoring digital currencies altogether.
Trying To Get 1 Billion Into The Banking System
As per a recent news report, Mastercard CEO Ajay Banga, who’s on a mission to bank upwards of 1 billion unbanked people across the world, doesn’t see much of a use in digital currencies for that.
Banga’s opinion is that assets like Bitcoin will not make such a significant pull towards financial inclusion.
According to the CEO, high volatility serves as a downfall for cryptocurrencies. He has highlighted that the value of the most popular one of them (Bitcoin) fluctuates by large amounts, emphasizing that just this year, one BTC changed its dollar value from less than $5,000 in March to almost $14,000 recently.
“Bitcoin per se is volatile in its valuation,” Banga said, adding, “Can you imagine someone who is financially excluded trading in a way to get included through a currency that could cost the equivalent of two Coca-Cola bottles today and 21 tomorrow? That’s not a way to get them included. That’s a way to make them scared of the financial system.”
Five years ago, Mastercard’s CEO embarked on a mission to help 500 million people worldwide get access to the financial system and bank services. This year the plan has upgraded up to one billion. According to Banga, people without bank accounts suffer the lack of access to credit while paying much higher fees for financial transactions via payday lenders, etc.
However, Trust In Crypto Remains
What MasterCard’s CEO failed to outline, however, is the censorship-resistant nature of decentralized cryptocurrencies, as well as the non-existing barriers to entry.
In other words, anyone with access to the internet can become a part of the network without having to go through lengthy and, in many cases, impossible registration procedures to open a simple bank account, for example.
Moreover, once they become a part of it, there’s no central authority that can ‘shut you down’ per se, regardless of your economic situation or current location.
There’s merit to his words, nonetheless, because some of the inherent challenges remain. For instance, people need a relatively high understanding of technology and a working computer and internet connection to become part of Bitcoin’s network – something that a lot of citizens in third-world countries simply don’t have.
Despite the CEO’s opinion, MasterCard has been on the road to adopting digital currencies for a while now. As CryptoPotato reported recently, the company partnered with UK-based payment processor Wirex to expand its cryptocurrency program and aid “adoption and create innovative experiences in the crypto space.”
Featured image courtesy of CNBC