MasterCard is lobbying the UK government for increased regulation of bitcoin and other digital currencies that pose a threat to its legacy credit-cards business, as it tries to adapt to the transformation of a payments industry long overdo for change.
“In the current environment we feel that the risks of digital currencies outweigh the benefits,” the company wrote in strongly worded letter, obtained by digital currency website Coindesk, in which MasterCard asks the UK government for more regulation of crypto currencies.
The letter, sent in response to the UK Treasury’s call for information last year, is the latest sign that established financial companies are taking bitcoin and other digital currencies more seriously—and pushing for a level playing field.
From the letter:
We would argue that, when compared to MasterCard’s network, the claims pertaining to the speed and safety of digital currencies does not hold up, not least given that on average it takes 10 minutes for a block to be verified and that digital currencies are far more susceptible to hacking attacks.
Additionally, while digital currency transaction costs are currently lower, this is because providers of digital currency services do not currently bear any compliance costs, whereas providers of other forms of electronic payment bear the cost of complying with consumer protection laws and anti-money laundering laws.
A MasterCard spokesman says the submission to the UK officials was “developed to help them understand the policy issues around virtual and anonymous currencies.”
Its claims are self-serving, of course, but the company has a fair point. If traditional financial companies that make loans, issue credit, and transfer money all have to follow globally agreed-upon rules to prevent institutional failures, consumer fraud, and illicit activity, then so, too, should the upstarts.