Mastercard is developing a system with fractional reserve banking


Payment giant Mastercard has applied for a patent on a system with fractional reserve banking cryptocurrency, which would reduce the time of transactions to a fraction of seconds.

In the patent application #20180308092 Mastercard describes a system where assets are tracked cryptocurrency and Fiat – in fact, a web wallet for cryptocurrency and conventional accounts. The company describes the network of cryptocurrency credit cards:

“Thus, there is a need to improve storage systems and transaction processing to use the cryptocurrency. The existing payment systems and networks, making the Fiat, specially designed and configured for the safe storage and protection of information about consumers and business… Combines the use of traditional payment systems and technology with blockchain currencies may give consumers and businesses the advantages of a decentralized blockchain, keeping the security of account data and fraud protection”

There is no doubt that Mastercard really is better to cope with the processing of the transactions: to confirm bitcoin transactions can take as long as 10 minutes. Conduct transactions in fractions of a second would mass adoption of the main cryptocurrencies, despite the problems of fractional Bank reserve.

However, fractional reserve banking is one of the problems that you sought to solve, the creators of Bitcoin. In General, cryptologist opposes based on the credit system currencies.

The provision of key traditional financial institution radically different from the philosophy of the supporters of bitcoin and other cryptocurrencies, which, for example, Coinbase has been heavily criticized.

Also fractional reserve banking allows financial institutions, like Mastercard, to monitor the demand for the derivative, which may cause an artificial increase in the number of bitcoins in circulation and lead to lower prices, as happened in the gold and foreign exchange market for many years. It is for this reason that many supporters are against bitcoin ETFs in BAKKT promises to offer physically backed by a bitcoin futures.

Recall that Mastercard is leading in the number of applications for the blockchain-patents, and is in third place c 80-th bids, ahead of Alibaba and IBM. In October, the company has received a patent for a system that can support different kinds of blockchains and transactions in multiple currencies.

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