Business 2 months ago

Dennis Wafula

Mastercard patent merges traditional banking with cryptocurrencies

Financial services giant Mastercard has snapped up yet another patent, this time for fractional cryptocurrency banking.

According to the document published by the U.S. Patent and Trademark Office (USPTO), Mastercard wants to apply principles of fractional reserve banking to cryptocurrencies. The filing explains how the payments processor will use laws of the fiat banking system to help solve safety problems associated with cryptocurrency transaction. By applying the centralized fiat banking system, Mastercard claims it can create a system that safely stores and protects both consumers and merchants.

Inventor Steven Charles Davis, senior consultant of research and development at Mastercard, claimed the nature of blockchain transactions creates a disadvantage for the consumers, who has to wait for their transaction to be approved by an unknown person. The customer has to “rely on the payer’s good faith that their transfer will be valid,” according to the patent filing, and in some cases, payees have lost their currencies after individuals failed to confirm their transactions.

The filing noted, “…the anonymity of the blockchain may leave the payee at a disadvantage, because the inability for the payee to identify the payer may prohibit the payee from utilizing various risk or fraud detection methods. Therefore, many entities, particularly merchants, retailers, service providers, and other purveyors of goods and services, may be wary of accepting blockchain currency for products and participating in blockchain transactions.”

Mastercard said its new application seeks to solve this problem by managing fractional reserves of blockchain currencies, “specifically the use of centralized accounts to manage fractional reserves of fiat and blockchain currency updated via transaction messages corresponding to fiat- and blockchain-based payment transactions.”

By integrating traditional payment networks with blockchain currencies, Mastercard hopes to “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.”

The financial giant has also sought patents for other blockchain-based applications. In July, Mastercard was awarded a patent for a system that reduces the time it takes to complete a cryptocurrency transaction.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Satoshi Vision (BSV) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BSV is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

COMMENT

Add a Comment

lastest news

Boerse Stuttgart to launch crypto trading venue in 2019

Business 2 days ago

Boerse Stuttgart to launch crypto trading venue in 2019

Boerse Stuttgart, the firm behind the Stuttgart Stock Exchange, is to launch a crypto trading market in 2019, in partnership with solarisBank. According to a statement published by the exchange, Germany’s second largest, Boerse Stuttgart ...

Read More
Startup Revolut gains European banking license

Business 2 days ago

Startup Revolut gains European banking license

UK-based fintech firm Revolut has been awarded a banking license in Lithuania, giving the firm access to provide current accounts and loan services across the EU from 2019. The London startup will initially focus on ...

Read More
Basis stablecoin folds, will return $133M in investments

Business 2 days ago

Basis stablecoin folds, will return $133M in investments

Basis, the heavily funded stablecoin, has confirmed rumors that it is to close, returning all of the funds to investors. The project, which had gained significant traction, was shuttered due to the unfavorable legal landscape, ...

Read More