Mastercard makes a move towards crypto, to develop blockchain software

Mastercard, a leading player in the payment processing industry, has recently filed a trademark application to protect its new tools related to cryptocurrencies and blockchain technology.

This move signifies Mastercard's growing involvement in the digital asset space and demonstrates the acceptance and support of traditional financial institutions towards these emerging technologies.

Exploring Mastercard's intentions

The purpose behind Mastercard's trademark application is to streamline the use of cryptocurrencies and blockchain technology. Through the development of software, Mastercard aims to enhance transactions involving digital money, facilitating smoother interactions between various virtual asset service providers (VASPs) and enabling seamless crypto transactions.

Mastercard's strategic vision

The filing of the trademark application sheds light on Mastercard's strategic vision for blockchain and digital currencies. By intending to create downloadable software with features such as application programming interfaces (APIs) to verify and handle transactions on blockchain networks, as well as facilitate the exchange of digital currencies, Mastercard aims to promote wider adoption and usage of cryptocurrencies in mainstream contexts.

Understanding cryptocurrency

Cryptocurrency refers to digital money that operates independently of traditional banking systems. It enables direct peer-to-peer payments without physical cash, utilizing a public online database to record transactions.

Cryptocurrency transactions are stored in digital wallets, acting as virtual repositories for digital assets.

The relationship between crypto and blockchain

Blockchain serves as the underlying technology that enables cryptocurrencies to function. It is a decentralized and distributed ledger system that records and verifies transactions across multiple computers or nodes.

Cryptocurrency, on the other hand, represents a specific type of digital currency that relies on blockchain technology for its operation.

Cryptocurrency volatility and market challenges

Cryptocurrencies have experienced significant price fluctuations, as exemplified by the market downturn in June 2022. While some investors view market downturns as opportunities to purchase cryptocurrencies at low prices and protect against inflation, the long-term value and wider acceptance of cryptocurrencies remain uncertain.

Despite their popularity, cryptocurrencies are not extensively used for everyday transactions in the real economy.

Also read: Why is the crypto market crashing? All you need to know

Government opposition and reliability concerns

Governments may oppose cryptocurrencies due to the challenge they pose to central banks' control over the money supply. Furthermore, the reliability of cryptocurrencies as a form of money is subject to debate.

While cryptocurrencies are seen as a potential hedge against inflation and erosion of wealth caused by central banks, their intrinsic value and long-term stability remain questionable.