Mastercard, the world’s largest credit card issuer, wants to patent “mirrored accounting” to enable accurate and auditable conversion of digital assets to fiat cash without crypto exchanges.
The goal of Mastercard is to make it simpler to convert cryptocurrency into cash and vice versa. The world’s largest issuer of credit cards is attempting to patent a method for “converting digital assets to fiat currency.” The core of this technology is a method Mastercard refers to as “mirrored accounting,” which mirrors a transaction onto a second record in order to guarantee a “reliable and auditable conversion” by effectively turning it into an immutable receipt.
To explain, this system first accepts transaction data made up of a payer identifier, recipient identifier, and amount in blockchain currency, and confirms that the parties involved are legitimate. The system calculates the payout (also referred to as the value of your cryptocurrency).
After a similar transaction on a different blockchain, validation is repeated. After verification, the recipient receives their incentive “without the need for an exchange and in a manner that is more reliable and efficient.”
Mastercard believes their solution replaces traditional crypto exchanges, citing their lack of regulation, transparency, and accountability. Due to the risks of converting digital assets to fiat cash, merchants may be exploited or hesitant to accept them.
To put it mildly, 2017 was a tremendously horrible year for cryptocurrency businesses. FTX, Voyager Digital, and Genesis Global are a few of the most noteworthy companies to have failed. FTX experienced a liquidity difficulty in November and filed for bankruptcy shortly after. Voyager Digital filed for bankruptcy in July.
The global crypto market has not yet fully recovered from its collapse in 2018. According to Aaron Rafferty, co-founder of StandardDAO, major financial companies like Mastercard showing interest in the technology could give the sector the confidence it needs to recover.
“The crypto market as a whole lost a lot of credibility”
With the FTX crash, “the crypto market as a whole lost a lot of credibility,” claimed Rafferty. But there will be a move in that direction. MasterCard has an obvious vision for that. Before that could actually happen, I believe some of the terrible players had to be eliminated.
According to Jordan Gutt, head of Web 3.0 tech at The Glimpse Group, this patent’s technology might revive crypto acceptance by explicitly assisting businesses in addition to restoring cryptocurrency’s legitimacy. This patent, according to Gutt, might enable businesses to accept digital assets and convert them into other currencies without the need for crypto exchanges.
“The merchants on the MasterCard network would derive the greatest benefits from this,” stated Gutt. “It removes the need for an intermediary exchange, which can be intricate, untrustworthy, or inherently risky,” explained the author.
For a time now, MasterCard has been considering blockchain technology. The business unveiled plans in February to enable its merchants to accept and settle transactions involving digital assets before the end of the year. Additionally, the company revealed last week that it is in discussions with a wide range of banks and fintechs about a digital asset credit card that would allow users to convert cryptocurrency to conventional fiat money. This patent might give us a better understanding of their blockchain goals.
While investing in blockchain technology may not be the most popular idea in the tech industry right now, MasterCard is making the most of an unfortunate circumstance. Gutt claimed that the corporation is ostensibly “positioning themselves to make the most out of the next bull run” by investing in new technology during a bear market.
Because they don’t want to fall behind, more respectable organizations are becoming involved, according to Gutt.