Mastercard CEO says Non-Government Digital Currency is “Junk”

Ajay Banga, the first President and CEO of Mastercard, recently spoke about cryptocurrencies, calling them "junk" if they do not have government backing.

Ajay Banga, the first Indian President and CEO of Mastercard, a global payment technology company, recently shared his views on the prevailing digital currencies, calling them “junk”.

In an interview with Economic Times, the CEO was asked about the move towards digital currency, something that presents a big challenge for a company that provides payment solutions around the world – an industry that can be disrupted by cryptocurrencies and blockchain-powered financial solutions.

His response should come as no surprise:

“If the government creates digital currency, we will find a way to be in the game. We will provide rails for moving currency from customer to merchant. The government mandated digital currencies are interesting. Non-government mandated currency is junk.”

Ajay Banga went on to criticize Bitcoin for its volatility and use-cases for illegal activities such as ransomware attacks. He also supported China’s crackdown on Bitcoin.

“If I pay for a bottle of water in Bitcoin, one day it is two bottles for a Bitcoin the other day it is 9,000 bottles. This does not work. Any currency needs stability and transparency, otherwise you will get all the illegal activities in the world. Why was the ransom for the virus (wannacry ransomware) collected in bitcoin? Why has China cracked down on bitcoin?”

It is clear that most financial bigwigs have not taken very nicely to Bitcoin and cryptocurrencies. We recently reported comments by Axel Weber, the former President of Bundesbank and Chairman UBS, who said:

“The important function of a currency is, it’s a means of payment, it has to be generally accepted, it has to be a store of value and it’s a transaction currency. Bitcoin is only a transaction currency.”

He went on to add:

“I get often asked why I‘m so skeptical about bitcoin, it probably comes from my background as a central banker.”

In September we saw JPMorgan CEO making quite the news with his comments on Bitcoin, calling it a “fraud” and a currency that is based on nothing.

His comments, which may not have been entirely truthful, ended up hurting Bitcoin’s price and received mixed responses from the industry.

Ray Dalio, the founder of Bridgewater Associates, which is one of the largest hedge funds in the world, was also among the detractors, pointing towards Bitcoin’s volatility:

"It's not an effective storehold of wealth because it has volatility to it, unlike gold. Bitcoin is a highly speculative market. Bitcoin is a bubble."

It appears that Brock Pierce, Chairman of the Bitcoin Foundation, believes that comments like these reinforce the fact that cryptocurrencies are moving in the right direction.

“When the incumbent industry is making statements like this and acknowledging’s a sign that what we’re doing is’s a huge validation,” said Brock in an exclusive interview with Cryptovest.