Mastercard has won a patent for the fractional bank cryptocurrency, which suggests that the global payments corporation has plans for a fractional reserve management system of currency blockchain.
The Mastercard Blockchain patent integrates the existing traditional payment networks with blockchain currencies
The patent, filed on 29 June 2018, refers to "the use of centralized accounts to manage fractional reserves of fiat and blockchain currency updated through transaction messages corresponding to payment transactions based on fiat and blockchain".
The inventor, Steven Charles Davis, senior research and development consultant at Mastercard, explained the need for such a mechanism.
Blockchain-based transactions can take a long time due to computer processing time and resources needed to verify and update the blockchain. This creates a problem between consumers and traders, in particular the beneficiary who "must rely on the good faith of the payer that his transfer will be valid".
"In the latter cases, the anonymity of the blockchain may leave the payee at a disadvantage, since the inability of the payee to identify the payer may prohibit the payee from using various methods of detecting fraud or risk ", reads the document
Moreover, it may be difficult for consumers to adopt, or even understand, currency blockchain, he said, adding that its anonymous nature may leave consumers "unable to prove their identity and ownership of a portfolio", so with "little resource if their portfolio and / or associated currency is stolen ".
The fractional reserve system for blockchain aims to improve the storage and processing of transactions using traditional traditional payment networks and payment system technologies in combination with blockchain currencies.
The inventor argues that integration is able to "provide consumers and merchants with the benefits of decentralized blockchain, while maintaining the security of account information and providing a strong defense against fraud and fraud. theft".
The method for managing fractional currency reserves in the blockchain currency includes receiving a transaction message associated with a payment transaction; identification of a specific account profile stored in an account database that includes the specific address, a fiat currency amount and a blockchain currency amount; and the update of the blockchain currency amount included in the identified specific account profile.
Ajay Banga, President and CEO of Mastercard, recently called "junk" cryptocurrency. His speech also addressed massive market volatility and popularity among criminals. Banga also claimed that digital assets do not deserve to be considered a medium of exchange. Meanwhile, a lot of blockchain R & D has been conducted in the subsidiary of the company based in Ireland to improve payment services.
Shutterstock foreground image.