According to the CEO of Mastercard, the volatility of the largest cryptocurrency makes it of little use in the fight against financial exclusion. Bitcoin is too volatile, he says.
Mastercard CEO: BTC too volatile to support financial inclusion
Ajay Banga, the CEO of Mastercard, is trying to connect a billion people worldwide to the banking system, but sees no use for cryptocurrencies like Bitcoin (BTC) in their quest for greater financial integration.
The reason is the volatility of cryptocurrency prices. The value of BTC, as well as most altcoins, is subject to large fluctuations. "Bitcoin per se is volatile in its valuation," Banga said at the Fortune Global Forum.
In his opinion, for this reason, cryptocurrencies not only will not help in increasing financial integration, but may even discourage unbanked people (not using banking services) from the financial system.
This is not the first time Banga has expressed his disapproval of cryptocurrencies. In 2017, it described all cryptocurrencies that are out of government control as junk, and criticized BTC for its volatility and use cases for illegal activities. "Government-backed digital currencies are interesting. Non-government currencies are rubbish," said the director of the financial services giant.
Mastercard sees potential in CBDC
Despite the negative stance on cryptocurrencies, the Mastercard CEO sees potential in digital currencies issued by central banks, the so-called CBDC. "We believe in central bank digital currencies," said Banga.
He says Mastercard has "invested a significant amount of money" in CBDC, adding that the company is now "one of the largest patent holders in the field of central bank digital currencies". Earlier this year, Mastercard created a test environment to help central banks develop digital currencies.
According to Bang, introducing such currencies could help improve certain aspects of the financial sector. "If fiat were to go digital, they would help cross-border trade flows and make them more efficient."
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