Mastercard Seeks Blockchain Patent For Fractional Reserve Banking
In the application, published by the United States Patent & Trademark Office (USPTO), Mastercard has been granted a patent for fractional reserve management of blockchain assets, which would involve the simultaneous storage of crypto and fiat to form ‘blockchain currencies’.
According to the document, each profile under Mastercard will have both fiat and cryptocurrency amounts, as well as certain identifiers to ensure the safety of the user’s account.
The main aim of this patented technology is to “improve on the storage and processing of transactions that utilize blockchain currencies.”
The opinion of Mastercard on blockchain technology has since evolved into something “good.” After a few years of maintaining the opinion that cryptocurrencies are directly tied in with criminal activity, Mastercard has taken a turn. Now, instead of attacking crypto, they are working on establishing a patent that would provide them with fractional reserve management of blockchain assets.
The application reads: “There is a need to improve on the storage and processing of transactions that utilize blockchain currencies… The use of traditional payment networks and payment systems technologies in combination with blockchain currencies may provide consumers and merchants the benefits of the decentralized blockchain while still maintaining the security of account information and provide a strong defense against fraud and theft.”
Mastercard seems to believe that there is a lot to be gained in combining crypto tech with traditional tech, and their system would most likely include the current payment networks and products in place.
In this respect, despite the problems associated with fractional reserves, Mastercard could potentially make a massive contribution to the crypto economy by enabling millions of existing clients to accept cryptocurrency payments. However, patents take time to process so we will have to see how this develops.
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