The CEO of MasterCard, Ajay Banga, has called cryptocurrency “Junk” this week. Banga claims that these digital “coins” are being used for illicit activities both on the internet and in real life. He went on to compare this to the way that cash is empowering people to transact in illicit deals. Banga went on to express his opinion that that credit cards, including those issued by the company he represents, presented a safer method of transacting with a better level of transparency.
Ajay Banga Speaks Out About Cryptocurrencies
Ajay Banga recently attended the “New India Lecture,” where he was asked about his opinion on cryptocurrencies and how these currencies compared to cash and credit cards. Banga’s response made his misbeliefs in cryptocurrencies clear. He pointed out that these “currencies” are not a good “medium of exchange.” He continued to explain that crypto coins do not offer the same transparency as standard payment mediums, such as a credit card. He added that these currencies also do not yield similar predictability as compared to more traditional currencies, such as the US Dollar.
Banga expressed his concerns about the fact that cryptocurrencies provide a way for making semi-anonymous transactions. With no authorities or banks involved in these transactions to monitor where money is being sent and, possibly, what it is being paid for, people are encouraged to turn to crypto coins for illicit transactions. When no authorities or central parties are involved, it is so much harder to track down the people who are participating in the dark web.
Banga went on to defend credit cards, discussing how credit and debit cards are not used for the funding of transactions that are considered illicit, as these cards are controlled by central authorities. Further on, he compared the anonymous “benefits” of cryptocurrency to those of cash, and advised that people need to start moving to a digital world, but should choose credit cards over cryptocurrencies.“Society needs to wake up,” said Banga.
Cryptocurrency Issues Addressed
During Banga’s speech at the New India Lecture, he defended his statements by pointing out several issues that cryptocurrencies are currently facing. In particular, he mentioned that fact that the exchange rates for these currencies can fluctuate quickly and “wildly,” which does not make them an ideal medium. He also mentioned his concerns about these coins being used for social security fraud, credit card fraud, drugs, and child prostitution. By paying for these illicit activities through cryptocurrency, authorities would have a much harder time catching the culprits, according to Banga.
The CEO of MasterCard also mentioned a recent incident where Bitcoin, considered the “main” cryptocurrency, was used for illicit activities. In the incident that took place in 2016, several Russian nationals were charged after hacking into the US government computers. A total of 12 intelligence officers from Russia faced charges, and it was later discovered that they hacked these computers in order to “rig” the 2016 election. Bitcoin was used to purchase the servers that they used to do the hacking.
This is not the first time that Banga and MasterCard have voiced their concerns regarding cryptocurrencies. Earlier this year, it was reported that MasterCard blamed the recent changes in the cryptocurrency world for the drop in their growth in the first-quarter of 2018. At the time, their cross-border transaction growth rate was down 2% from the previous quarter.
MasterCard blamed this reduction in their growth rate on the fact that fewer people were using their cards to buy Bitcoin, as well as other cryptocurrencies. These events came after several financial institutions, including Citigroup, JPMorgan Chase, and the Bank of America started to ban the use of their credit cards for the purchasing of Bitcoin and Altcoins.