Virtual money roll on a fiat rails

International payment and technology company Mastercard recently acquired a patent for a new, perspective technology and opens new and exciting possibilities in the world for crypto for them.

In the papers, released by USPTO sometime later it is explained that because of the rising interest towards cryptocurrency because of the higher levels of anonymity and security that blockchain based currency can provide. However, because of the wide disparity in payment processing times between the two classes of assets virtual currencies at the disadvantage.

In the document, there is a description, why a system like this is important. It goes to explain: It often takes a significant amount of time, around ten minutes for a blockchain-based transaction to be fully processed. Conversely, traditional fiat payment transaction that is processed using payment networks often have processing times that are measured in nanoseconds. Therefore many entities, particularly in the field of goods and services, are not that interested in blockchain based currency for products or services and participating in blockchain transactions.

To solve this issue, the company would offer a new type of user account, that will be able to perform financial operations with cryptocurrencies using the system that is already in place for fiat money. Such account will be linked with a series of profiles able to identify a user’s fiat currency amount involved in a transaction, a blockchain currency amount and identify the account and address of transaction.

Basically, that means that transactions themselves will be using already existing fiat currency payment “rails” and existing security measures, but each transaction would be represented in virtual money.

Because of the way to cryptocurrencies are processed, payment network will be able to evaluate the likelihood of fraud, measure risks and information that is available to payment networks, such as a history of transactions, credit bureau information, demographic information that is unavailable for use in purely blockchain network. Public opinion about this matter is different. One part of the community is negative about it and sees no point in working with a decentralized currency that goes through the centralized bank since it kills its main purpose. But another part of the community sees this as a step in a right direction since eventually, it will mean a wider acceptance of the virtual currency among general public and business.