Ajay Banga, the president and chief executive officer of international financial services company MasterCard, has recently argued that cryptocurrencies are “junk,” while seemingly supporting an increase in credit card payments to enforce money as a system of control.
According to a report from the Press Trust of India, Banga voiced concerns over the number of cryptocurrency transactions being conducted on the dark web, where users often pay for illegal products and services, which include child pornography and credit card fraud.
He was quoted as saying:
I think cryptocurrency is junk. The idea of an anonymized currency produced by people who have to mine it, the value of which can fluctuate wildly - that to me is not the way that any medium of exchange deserves to be considered as a medium of exchange.
Banga’s words on cryptos came as he was responding to a question during the “New India Lecture” organized at the Indian Consulate. During his response, he added that cryptocurrencies aren’t a good medium of exchange, as they lack “predictability and transparency.”
In an attempt to show cryptocurrencies aren’t good news, he referred to a recent case that saw 12 Russian nationals reportedly interfere with the US’ 2016 Presidential Elections using Bitcoin.
Per his words, cryptocurrencies like bitcoin are used in these cases and in dark web transactions because of their semi-anonymous nature. He said:
Why civil society would like to put a snake in its backyard and think that somehow the snake will only bite my neighbour, I don't get it.
In his arguments, he noted that cash payments should be reduced as the world enters an era of electronic payments. According to the press release, Banga argued cash is used to fund illicit activities, including drug use and terrorism financing, while credit cards aren’t used for such purposes.
Credit cards, presumably, aren’t used to fund illicit activities as their transactions are heavily controlled, meaning financial institutions can unilaterally deny people access to their own money, without proper justification. Nevertheless, Banga stated that “society buys into the logic that cash is free and electronic payments are expensive. Society needs to wake up.”
Notably, the law commission of India recently revealed it sees cryptocurrencies as an “electronic means of payment.” This ,shortly after the country’s central bank, the Reserve Bank of India, pushed the Supreme Court for cryptocurrency regulations.
Elsewhere, Banga noted the world’s governments need to start debating “how open trade should be constructed” while referring to the escalation of a potential trade war between the US and China.
MasterCard itself has earlier this year showed it isn’t too fond of cryptocurrencies, as it blamed them for a slip in its first quarter’s growth. At the time, Banga revealed cryptocurrencies weren’t a part of the firm’s long-term strategy because of their volatility.