The CEO of MasterCard, Ajay Banga spoke at the ‘New India Lecture’ held earlier this week. The lecture was organised by the US-India Strategic Partnership Forum (USISPF), where during his speech he called cryptocurrency a “junk”. According to him a form of currency that is “anonymised” and fluctuates this much does not deserve to be considered as a medium of exchange. He said cryptocurrency is not a good medium of exchange because it lacks predictability and transparency.
The head of the American multinational financial services corporation voiced concern that 95% of all transactions on the dark web, including drug trafficking, child prostitution, and social security fraud are done using cryptocurrency.
Banga also pointed towards the indictment of 12 Russian intelligence officers who hacked the Democratic National Committee and for intervening in the US elections. He added that the FBI had disclosed that Russian agents handled their most confidential transactions using Bitcoin, and that cryptocurrency is used in such places because it is “anonymous”.
Recently, there has been an escalation of a trade war between countries as they impose tariffs on goods in a give-take manner, to which Banga says that countries have always benefitted over the years from the openness and transparency of the markets and they need to play by the rules, whether these rules are obvious or slightly superstitious.
Banga also asked people to prefer electronic payments or debit and credit cards over cash, supporting the statement that cash and not credit cards add to the illicit payments involved in drug distribution and terrorism. He cited the example of India, which is deeply impacted by terrorism. He supported Prime Minister Narendra Modi’s push towards digitisation and enabling a cashless society.
Cryptocurrencies are the most direct opponent for a company like MasterCard. Certainly digital currencies are becoming the biggest disrupter in the market right now, and even settled money movers are now scathed. Similarly, Banga’s attacks on Bitcoin did not bring up any new visionary or something new, just spurting the usual challenges without much backing or research. It is quite apparent that banks and investors are fearful of Bitcoin becoming the real deal in the coming days as it continues to break records and blowing precedents out of the scene. Looks like Banga too has a stake in the pie and obviously, does not want to lose his fair share.