Cryptocurrency

CEO of Mastercard revealed the causes of the abandonment of the project Pound of Facebook

The chief executive of the corporation Mastercard, Ajay Banga, railed against Facebook and its project of criptomoneda Pound to say that I didn’t understand how it would make money with it and that the creation of the portfolio Calibra was not in tune with the proposal of promoting a currency with global reach.Nearly four months after the withdrawal of Mastercard association Pound, a conglomerate of companies that supported the initiative of Facebook, the government of India questioned the events that occurred after the formation of the group and said that the topic of regulatory and business model influenced the decision of the multinational company to take a step to the side.Quoted by the newspaper Financial Times, Banga stressed that the members of the association do not undertake to do nothing that does not comply fully with local laws, and cited measures such as Know your Customer (KYC), anti-Money Laundering (AML) and data management. According to Banga, he would have asked directly to the main promoters of a Pound that if all these aspects would be established in writing and stated: “they would Not”.The profitability of the project, Banga was blunt to say that, by not understanding how it would generate income, the work was to be done in a way that people didn’t like, what precipitated the abandonment of the project. Although the reasons of the CEO are significant, there was an additional element that triggered their alarms about the viability of the project. It is the creation of the portfolio Calibra, a project that would serve to manage the funds of the participants.In connection with this proposal stated: “it went from this idea of altruistic (to create a global currency to your own wallet and said ‘this doesn’t sound good”. Banga felt that if you want to really promoting financial inclusion, then there is to offer instruments that is able to understand and use it to “buy rice,” for example, so I added: “I don’t understand how that works”.

Data management

The reasons for the exit of Mastercard from the Association Pound would be based in addition on the integrity and management of data from the participants. This, because of the scandal that triggered Facebook and the company Cambridge Analytica by bad practices in the management of data 87 million users of the social network, which could be considered as one of the greatest episodes of violation of privacy of the users up to date.With this as background and then to question some of the main decisions that were taken, not only Mastercard took a step to the side. Other companies, such as Visa, eBay, and PayPal, among others, have said that, for the time being, withdrew from the project Libra to focus on other business models.This is not the first time that Banga refers to bitcoin or to the cryptocurrencies in general. In October 2017, the executive said that the cryptocurrencies not created by governments are rubbish, but that yes it would support government initiatives to create new payment mechanisms controlled by the States.