MasterCard has spoken out against the risks associated with bitcoin, calling for Australian regulators to level the playing field between the crypto-currency and other payments systems.
MastCard provided a submission to the Australian inquiry into digital currencies, which is headed by the Senate Standing Committee on Economics.
The card processor argued that “all participants in the payments system that provide similar services to consumers should be regulated in the same way to achieve a level playing field for all”.
MasterCard added that the technological advances associated with bitcoin should not free it from regulation.
Moreover, any regulations should be technology neutral to ensure that they can and do apply to all new providers of payment services to consumers, especially with advancements in technology,” the statement said.
The company expressed fears that since digital currencies currently lack the basic protections expected of MasterCard products, they lack adequate consumer protection.
The anonymity provided by digital currencies, the company argued, means they can be used for illegal activities and are susceptible to money laundering. The fluctuation in bitcoin value was also noted.
Were a crisis of that nature to occur, MasterCard said, crypto-currencies lack a third party backer such as banks, administrators or regulators that could intervene.
“This means that consumers have no recourse if a digital currency loses its value or if the digital currency system fails,” MasterCard said.
Pro-bitcoin groups have noted that an attempt to stuff bitcoin into a pre-existing regulatory structure would be counterproductive, CoinDesk reported, and disadvantage the Australian FinTech community.
The Senate held its first hearing on digital currencies last week, after tasking the Economics References Committee with examining the impact of digital currencies in early October. Submissions closed on 28th November after 31 individuals and institutions contributed to the enquiry, including bitcoin companies, financial instituions and regulatory bodies.
The committee is scheduled to report its findings in March 2015.
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