People using Mastercard credit cards might soon be able to pay for goods or services using bitcoin as a currency. On Tuesday the financial services giant announced that it was awarded a patent for a new technology that would significantly increase the speed of digital currency transactions.
On July 17th the US Patent and Trademark Office released an official document, which explains that “blockchain currencies have seen increased usage over traditional fiat currencies by consumers who value anonymity and security”.
However, the document further elaborates that, “such security may be limited for payees, particularly due to the limitations of the blockchain. For example, it often takes a significant amount of time, around ten minutes, for a blockchain-based transaction to be processed, due to the computer processing time and resources required to verify and update the blockchain. Conversely, traditional fiat payment transactions that are processed using payment networks often have processing times that are measured in nanoseconds.”
To fix the transfer duration issue, Mastercard is planning to develop a new type of user account, in which they will be able to transact cryptocurrencies pegged to a fiat currency. The new system would significantly reduce the time it takes for two crypto payments to travel between two accounts. The user account would interlink numerous profiles to identify “fiat currency amount, a blockchain currency amount, an account identifier and an address” of a user.
According to the patent, the new system would use beneficial aspects of both sides of the currencies spectrum, as, “the use of traditional payment networks and payment systems technologies in combination with blockchain currencies may provide consumers and merchants the benefits of the decentralized blockchain while still maintaining security of account information and provide a strong defense against fraud and theft.”
Speaking to CNBC, Fundstrat Global co-founder and prominent crypto bull Tom Lee claimed that this is great news for crypto community, as “it’s really validating the idea that digital money, or blockchain-based money, is a valid form of transaction.“ He has also pointed to Japan, which has legalized virtual currencies as a valid payment method over a year ago, in April 2017.
This is not the first instance of Mastercard dabbling with patents, associated with the distributed ledger technology. Back in November, the company was awarded a patent for a blockchain system what would reduce the time and energy needed to confirm a transaction made with Mastercard. More recently, the company explored the use of blockchain in fighting fake identities and announced it would hire more blockchain specialists to its R&D arm Mastercard Labs.
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