Mastercard Files Patent for Bitcoin Transactions with Accounts

The credit card company could soon offer a way to merge a customer's paper money with their cryptocurrency into one account.
Shelby Rogers

Mastercard's latest patent filing brings the world one step closer to using cryptocurrencies on common banking profiles. The company has been granted a patent that gives it rights for a way to manage "fractional reserves of blockchain currency."

The method details storing both fiat (or traditional paper currency made by the government) and cryptocurrencies under a single profile -- effectively linking two accounts with the bank. The merger could one day allow Mastercard holders to charge their credit card purchases by using bitcoin. 

The patent makes a bold statement for Mastercard. Currently, card holders can only pay for things using currency the government has found viable legal tender. However, the company still remains optimistically cautious toward blockchain-based transactions. 


"While blockchain currencies can often provide such safety and security for the payer's information, such security may be limited for payees, particularly due to the limitations of the blockchain," the document said. 

Because of this, everyone opting to use blockchain as the process for payment will have to wait for the money to go through. Effectively, any transaction made via blockchain for right now would be one made on good faith that the purchase was valid. 

"Many entities, particularly merchants, retailers, service providers, and other purveyors of goods and services, may be wary of accepting blockchain currency for products and participating in blockchain transactions," the document concluded.

The details themsevles are still unclear. However, bringing blockchain and more cryptocurrency into the larger market could normalize it. Overcoming the hurdles of both novelty and doubt remain some of blockchain's biggest barriers to being more globally used. Economic thinkers hope that by bringing more instances of blockchain and cryptocurrencies to the market that the entire process will become more efficient. 

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Seth Eisen serves as Mastercard's senior vice president for communications. In an email to CNBC, Eisen wrote, "We’re consistently looking at ways to bring new thinking and new innovations to market to create value for us and our customers and cardholders. Patent applications are part of that process, taking steps to protect the company’s intellectual property, whether or not the idea ever comes to market."

According to official reports, no specific product featuring cryptocurrency or blockchain has been brough to market yet. Supporters of digital currency and blockchain's potential still see this move as a huge win for digital currencies. Fundstrat Global Advisors Tom Lee spoke with CNBC about the topic, and told the media outlet that it's promising for blockchain's future.

"It’s really validating the idea that digital money, or blockchain-based money, is a valid form of transaction," Lee, who serves as managing partner and head of research at the equity research firm, said on "Fast Money" Tuesday.


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