Global payments processor Mastercard’s chief financial officer, Martina Hund-Mejean, has shut down any speculation that the company would be interested in enabling bitcoin transactions on its network.
“If it’s unregulated, and a government doesn’t stand by a currency, we won’t work with it. So we’re not going to work with Bitcoin. It’s unregulated, not transparent, and it doesn’t meet any regulatory requirements from a money laundering or know-your-customer point of view,” Hund-Mejean told Arabian Business in an exclusive interview yesterday at the company’s UAE headquarters in Dubai.
“If a currency were to be a fiat, digital, we’d be more than happy to enable it on our network. It takes us about 24 hours to enable a new currency on our network. But it has to be fiat, backed by a government, and transparent,” she added.
However, Mastercard, is cautiously optimistic about the promise of blockchain technology which lends it the view that Ripple needs to be separated from “the others”, according to Hund-Mejean.
“Ripple has used the blockchain to create a messaging format to aid clearing, similar to what SWIFT does. The blockchain might be very good in that instance in terms of messaging, because you can run a lot of fields through the blockchain to do it. But SWIFT has also been investing in this as well, and you are starting to see some competition in the market.
SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication (SWIFT) that connects financial institutions globally over a network, enabling them to send secure and standardised information about financial transactions.
The payment processing industry in which Mastercard is the world’s second biggest player, involves authorising, clearing and settling these transactions. “What these solutions, [Ripple and SWIFT] do is clearing. We’ll see where it ends up but we expect quite a few companies, traditional and fintech, to innovate in that,” added Hund-Mejean.
Ripple’s blockchain network, RippleNet, has been seeing a wave of interest, including from Abu-Dhabi based UAE Exchange which earlier this month agreed to test and pilot the technology’s messaging system to clear financial transactions. For Mastercard’s CFO, however, Blockchain’s promise, and consequently Ripple’s, come with caveats.
“We have our own blockchain and are working to connect it with our settlement agent, which Ripple doesn’t have. You have to go you have to go the route of their currency to settle, which a lot of people don’t want to do because their currency is unregulated,” said Hund-Mejean.
“We definitely see a place for the blockchain but in terms of instant payments on it, it’s light years away. Parts of the blockchain can be utilised in the payments process, but that doesn’t mean you’ll be doing settlement any time soon,” she added.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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