Cryptocurrency is looked upon in many ways. For some, it is an investment, while some look at it as a disruptive technology. During its inception and post its introduction, cryptocurrency was subjected to a lot of controversies and debates questioning its authenticity. Nevertheless, despite all debates and skepticism, people still invest huge sums of their earned money in different cryptocurrencies.
Here is some good news for them! They can now convert their cryptocurrencies into fiat currency. Payment card giant Mastercard has launched cryptocurrency-linked payment cards in the Asia-Pacific region. This will enable people to dilute their digital assets into fiat currency. The cards will remove any barrier between merchants who do not accept cryptocurrency as a payment. This is why it is said that Ethereum blockchain is the future.
Let us know the real reason behind this big move. But, before we dig deeper into the reason behind this decision, let us know what are digital assets and fiat currency.
What are digital assets and fiat currency?
Digital Assets
A digital asset is any form of investment that exists in a digital form and always comes with the right to use it anytime. Remember, data that doesn't possess that right are not considered digital assets.
Example: Cryptocurrencies like Bitcoin, all the data stored in digital platforms, etc.
Fiat Currency
Fiat Currency is any form of government-issued currency that is not backed by any commodity like gold.
Examples: Indian rupee, Dollar, etc.
What is the decision?
Payment behemoth Mastercard announced that the company is collaborating with three crypto finance firms - Amber Group from Hong Kong, Bitkub from Thailand, and Coinjar from Australia. The partnership is intended to introduce cryptocurrency-linked credit, debit, and prepaid cards for individuals and companies in the Asia-Pacific region. These cards will enable the users to instantly convert their cryptocurrencies into fiat currencies to make their payments, wherever master card payments are accepted.
“We are preparing right now for the future of crypto and payments, announcing that this year Mastercard will start supporting select cryptocurrencies directly on our network. This is a big change that will require a lot of work. We will be very thoughtful about which assets we support based on our principles for digital currencies, which focus on consumer protection and compliance,” Officials working in MasterCard said.
Why was this decision taken?
Mastercard believes that the introduction of a crypto payment facility is surely in the interest of those who have invested in cryptocurrencies. The decision was taken citing the increasing interest of the people to invest in digital assets. The behemoth discovered in a survey that around 45% of customers in Asia - Pacific region are considering the use of digital coins in the coming years.
In one year itself, the interest of the common people to invest in digital assets has soared by 5%. “In collaboration with these partners that adhere to the same core principles that Mastercard does—that any digital currency must offer stability, regulatory compliance, and consumer protection—Mastercard is expanding what’s possible with cryptocurrencies to give people even greater choice and flexibility in how they pay,” said Rama Sridhar, Mastercard’s executive vice president who oversees digital partnerships in the Asia Pacific, in the statement.
Impact of this decision on the market
This decision to use cryptocurrency in our routine purchases will surely create a deep impact on the market. The sales are likely to increase and so more money is likely to be invested in cryptocurrencies. It can also open a new chain of customers for merchants and retailers.
Although, Mastercard has made it clear that not all cryptocurrencies will be supported on their network.
Conclusion
Cryptocurrencies are the new trend, Despite criticism, it is flourishing as one of the best modes of investment. Mastercard incorporating Cryptocurrency in their cards has increased their credibility irrespective of their debates.
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