MasterCard recently introduced a new and innovative product based on an invite-only blockchain API for financial institutions. This is aimed at helping these institutions process fiat transactions in a more efficient manner.
The introduction of blockchain technology into the finance industry especially via FinTech companies has had significant impacts in the industry. As a result, financial industry giants such as MasterCard and large global banks are beginning to jump on the train. It is reported that MaserCard is rolling out its own blockchain solution so as to better serve their clientelle.
Commenting about this development, Justin Pinkham, Senior Vice President of MasterCard Labs stated that the company was only introducing blockchain technology to their operations in their quest to improve efficiency and that they are not creating a new cryptocurrency:
“We are not using cryptocurrency, and we are not introducing a new cryptocurrency, because that introduces other challenges – regulatory, legal challenges. If you do payment, then what we can do is move those funds in the way that we do today in fiat currency.”
Blockchain technology is the backbone of cryptocurrencies; the technology has ensured a decentralized financial regime where thousands of cross-border transactions are executed per second with relatively higher efficiency as compared to what pertains with the traditional financial system – blockchain technology transaction processing systems are usually driven by the consensus of all nodes in the network.
Despite the continuous breakthroughs and strides that blockchain technology has been making in recent months, cryptocurrencies by themselves are still yet to gain mainstream adoption. One major debilitating factor for this is the fact that the majority of the world’s population is yet to fully grasp or understand the technology and its modus operandi. As a result, blockchain-focused bodies and entities such as ICOWatchlist.com and masterthecrypto.com have taken it upon themselves to constantly conscientize people about the blockchain and cryptocurrency space.
More and more institutions are getting hooked onto blockchain technology to help better their operations. IBM recently partnered with Stellar to process cross-border payments across the South Pacific region through the use of blockchain. The difference between this and that of MasterCard is that IBM actually makes use of cryptocurrencies for this operation.
At the moment, this MasterCard solution is based on invite-only, we can however expect to see an expansion of usage in the coming months.
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