MasterCard CEO Ajay Banga has said that Bitcoin can never promise financial inclusion for the unbanked due to its increased volatility and lack of clear structure.
Since it launched, Bitcoin has revolutionized the financial markets with big-game players adopting the coin in some cases to make gains. Various financial institutions have also tweaked the way they operate to be able to remain in the game.
Due to the digital asset being decentralized, nobody controls it, which has pushed many analysts and experts to say that it can promise the unbanked financial inclusion.
MasterCard CEO faults Bitcoin volatility as a significant limitation
Financial institutions are now trying to overthrow the crypto sector as space has shown stiff resistance to topple them. MasterCard CEO Ajay Banga has said that even though the world has accepted bitcoin with so much fanfare, he thinks it is very volatile and lacks a clear structure.
With this in mind, the CEO has affirmed that Bitcoin will never bank the unbanked due to these factors. Even though Ajay holds such an opinion about Bitcoin, he says Central Bank Digital Currency (CBDC) presents a better chance to achieve what Bitcoin cannot.
Giving his statement at the Fortune Global Forum conference, Ajay said that Bitcoin would not function as a financial inclusion tool because of its volatility issues. Ajay also mentioned that the lack of knowledge about who is behind the digital asset is worrying.
Also read:“I am not a believer in the volatility or, for that matter, the absence of transparency in who is the person who’s involved with that currency. So, that’s why central bank digital currencies, we’re believers in,” Ajay said.
Ajay shows unwavering support for state-backed CBDCs
Moving further, Banga also mentioned that MasterCard is currently working on a patent library that shares the same relation with CBDCs. This has shown the reason why he has been in support of digital currencies.
To answer the question about bitcoin being the solution for financial inclusion, Ajay used an illustration of a coke bottle to buttress his point.
“Can you imagine someone who is financially excluded trading in a way to get included through a currency that could cost the equivalent of two Coca-Cola bottles today and 21 tomorrow? That’s not a way to get them [included]. That’s a way to make them scared of the financial system,” Ajay said.
To finalize his statement, Ajay said he feels if fiat currencies ventured into the digital world, then cross border traded flows would receive a boost. Ajay Banga has maintained his strong stance against bitcoin for years, branding all non-government issued crypto as junks some years back.
In 2018, he said crypto were like snakes and should never be considered a means of exchange. However, MasterCard has continued to show their unwavering support for state-backed digital currencies.
The CEO recently announced that the firm already invested massively in CBDCs. “Today, we’re one of the largest patent holders in the space of central bank digital currencies,” the CEO said.
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