Mastercard have just won a patent which allows a ‘Method and system for linkage of blockchain-based assets to fiat currency accounts’.
The patent is based around the flaws of cryptocurrencies, i.e processing times. It is good to see a company like Mastercard recognize cryptocurrencies are gaining traction however we should bare in mind that one of the biggest driving forces behind cryptocurrencies is its trustless and decentralized nature. Once a third party like Mastercard is added to the equation we lose both of these driving forces.
Here is the summary as laid out in the patent:
A method for managing fractional reserves of blockchain currency includes: storing, in a first central account, at least a fiat amount associated with a fiat currency; storing, in a second central account, at least a blockchain amount associated with a blockchain currency; storing, in an account database, a plurality of account profiles, wherein each account profile includes data associated with a consumer including at least a fiat currency amount, a blockchain currency amount, an account identifier, and an address; receiving, by a receiving device, a transaction message associated with a payment transaction, wherein the transaction message is formatted based on one or more standards and includes a plurality of data elements, including at least a data element reserved for private use including a specific address and a transaction amount; identifying, by a processing device, a specific account profile stored in the account database where the included address corresponds to the specific address included in the data element in the received transaction message; and updating, by the processing device, the blockchain currency amount included in the identified specific account profile based on the transaction amount included in the data element in the received transaction message.
So, though probably good news for Cryptocurrency on the whole, especially as far as ‘mainstream adoption’ goes, it is when it comes down to it Mastercard laying down the foundations to ensure they have a system in place which ‘if’ Cryptocurrency transactions continue to increase they don’t miss out on their piece of the pie.