Mastercard’s new patent hints at paying via cryptocurrency on your credit card
The latest patent granted to Mastercard looks to close the gap between fiat currency and cryptocurrency transaction speeds…
A new patent granted by the United States Patent & Trademark Office has given a big clue as to what Mastercard might have up its sleeve.
That’s because the credit card giant now has a patent described as a “method and system for linkage of blockchain-based assets to fiat currency accounts”. The application also cites a “description of systems and method for managing fractional reserves of blockchain currency”.
It originally filed the patent back in May, but got its rubber-stamping this week.
What does it mean? It’s not too big a stretch to suggest that Mastercard is working on a system that could allow Bitcoin transactions to be made via credit card. The nub of what it’s trying to do comes down to faster processing of blockchain transactions, a huge hurdle for cryptocurrencies to face against traditional fiat currencies. When it can take ten minutes or so to verify a transaction, it makes crypto at point of sale a tall order. Especially when fiat currency transactions can be completed in nanoseconds.
That seems to be the problem that Mastercard is trying to resolve. It’ll do so by tying an account to a fiat currency, even though the transactions would be in crypto. The methodology, as explained in the patent abstract, is:
“storing, in a first central account, a fiat amount associated with a fiat currency; storing, in a second central account, a blockchain amount associated with a blockchain currency; storing a plurality of account profiles, each profile including a fiat currency amount, blockchain currency amount, account identifier, and address; receiving a transaction message associated with a payment transaction, the message being formatted based on one or more standards and including a plurality of data elements, including a data element reserved for private use including a specific address and a transaction amount; identifying a specific account profile that includes the specific address included in the data element in the received transaction message; and updating the blockchain currency amount included in the identified specific account profile based on the transaction amount included in the data element in the received transaction message”
Or, in short, a chain that will identify a user’s fiat currency, their blockchain currency, their account profile, and transaction.
You can read the full patent for yourself here. Quite when Mastercard intends to put it to use remains to be seen…