JAKARTA – The popularity of cryptocurrencies has continued to increase in recent years even though in recent months the price has decreased significantly. In addition, Bitcoin cs has also begun to be adopted by a number of countries and companies as an alternative payment.
Responding to these conditions, Mastercard stated that the price of cryptocurrency is too volatile to be classified as a suitable payment instrument.
This view was conveyed by Mastercard Chief Financial Officer Sachin Mehra. He added that central bank digital currencies (CBDCs) and stablecoins are more suitable as medium of exchange.
Many executives of the payment services giant have shown a pro-crypto stance over the past few years, while companies are signing multiple partnerships that enable digital asset solutions for users.
On the other hand, Mehra believes the future of crypto is bright. Therefore, digital currency is claimed to be able to help the transition of payment systems from cash to electronic.
“When you think about it globally, there's still a ton of cash still to go electronic,” Mehra said, in an interview with Bloomberg.
Although Bitcoin cs and the underlying technology have provided benefits to the financial system, Mehra considers that cryptocurrency is too volatile to be used as a medium of exchange.
"If something fluctuates in value every day, so your Starbucks coffee costs $3 today and tomorrow it will cost you $9, and the day after it will cost you a dollar, that's a problem from a consumer mindset point of view," says Mehra.
Therefore, Mehra includes crypto in the asset class category. Meanwhile, stablecoins and CBDCs are considered to have great potential as payment instruments because their prices are not as volatile as Bitcoin cs.
For information, CBDC is a digital currency developed by the central bank and supported by the government. Hence the CBDC is centralized. This is in contrast to more decentralized cryptocurrencies. Although stablecoins are cryptocurrencies, their prices are tied to physical currencies such as dollars, euros, and others. Therefore, the price does not fluctuate.
At the same time, Mastercard's Global Head of crypto and blockchain, Raj Dhamodharan, believes that cryptocurrencies are not detrimental to investors. According to him, cryptocurrencies are part of a “technology package,” this makes cryptocurrencies unique.
“Bitcoin is not just about currency. It's also about chains. It's also about the cryptology behind it and decentralization and all that," said Dhamodharan. He also called the emergence of NFT a great discovery, quoted from CryptoPotato.
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