Mastercard CEO Ajay Banga has claimed that cryptocurrencies are “junk”, condemning their anonymity features and their capacity for illegal commerce on the dark web.
While speaking at the New India Lecture, Banga said:
“I think cryptocurrency is junk. The idea of an anonymized currency produced by people who have to mine it, the value of which can fluctuate wildly – that to me is not … to be considered as a medium of exchange.”
Banga: Credit Cards, Not Crypto
Instead, Banga is advocating for credit cards and other centralized electronic payment systems. Cryptocurrency isn’t the only target; Banga has also declared a war on cash. In fact, the Indian government has demonetized some rupee denominations to reduce crime and counterfeiting, indicating that this is a prominent issue.
Banga claims that credit cards can hamper crime, noting that drugs aren’t paid for with credit cards.
“Do you really believe that [drugs] come in exchange for a credit card payment? They come in exchange for cash and yet society buys into the logic that cash is free and electronic payments are expensive. Society needs to wake up.”
But not all crime is the same. It is worth noting that when it comes to fraud, credit cards are not so innocent: in Australia, for example, it is known that credit card fraud accounts for 78% of online fraud. Of course, there is no shortage of crypto fraud, either.
Cryptocurrency’s price volatility is also a real phenomenon, although not as universal as Banga suggests. Although cryptocurrency does “fluctuate wildly”, in some cases it is a relatively stable option. Individuals in Zimbabwe, for example, adopted Bitcoin during a hyperinflation crisis before the country banned it. Additionally, stable coins like Tether and Stasis—which have their value tied to a fiat currency—are a growing trend.
A War on Crypto?
Credit cards and cryptocurrency have been at war for some time now. Mastercard and VISA have put fees on some cryptocurrency transactions. Mastercard has also filed a patent for a crypto payment network that would apply existing security oversight to crypto transactions.
Meanwhile, a recent VISA outage caused crypto companies to promote cryptocurrency as an alternative. The Trezor wallet tweeted, “#Visa is down. Not a problem. We have #Bitcoin,” only to be received with nearly universal mockery in the comments at the suggestion that Bitcoin was as widely usable as Visa.
Perhaps this is as much a war over users and adoption as it is over principles.