Mastercard Gives Reasons Why It's Better Than Bitcoin

Mastercard is lobbying the British government to tighten regulation of bitcoin and other digital currencies as they threaten its traditional credit card business as it struggles to adapt to the rapid transformation of the payments industry.

“In the current environment , we believe that the risks of digital currencies outweigh the benefits , ” the company wrote in a strongly worded letter obtained by digital currency website Coindesk , in which it asked the UK government to tighten regulation of cryptocurrencies.

In response to a call for information from the U.K. Treasury last year, the letter is the latest sign that big financial firms are starting to take bitcoin and other digital currencies more seriously — and are pushing for a more level playing field.

The letter states :

We believe that the claims related to the speed and security of cryptocurrencies are unsubstantiated when compared to MasterCard’s network , especially given that it takes an average of 10 minutes to confirm a block and that cryptocurrencies are more susceptible to hacker attacks.

Additionally , while digital currency transaction costs are lower now , this is because digital currency service providers do not currently bear any tax enforcement costs , whereas other forms of electronic payment providers bear the tax enforcement costs of complying with consumer protection laws and anti-money laundering laws.

A Mastercard spokesman said the application was submitted to British officials "to help them understand the policy issues surrounding virtual and anonymous currencies."

Sure , its claims are self-serving , but the company has a fair angle: If traditional financial firms that make loans , issue credit cards and transfer money follow globally accepted rules to prevent institutional failures, consumer fraud and illegal activity , then digital currency companies should follow the same.