MasterCard at Australia Senate Inquiry: Bitcoin Needs Transparency, Licensing and Consumer Protections

MasterCard made a submission to Australia’s Senate Economics Committee for the ongoing inquiry into digital currencies.

In it, MasterCard Australasia’s Division President, Eddie Grabler, expressed concern over the pseudo-anonymity of digital currencies. Mt. Gox is cited as an example where such anonymity has made it practically impossible to recover funds for investors. Even though addresses and transactions are publicly visible, this is of little value if they can’t be linked to real identities.

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Bitcoin and Ripple were listed as example digital currencies.

In MasterCard’s view, “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.”

Like the ATO submission, rulings from other countries are referenced. But instead of Germany and the US, it’s Russia, China and India. “Russia deemed digital currencies as an unlawful substitute for money and is planning to pass a law in 2015 that would ban digital currencies,” while China and India have forbade financial institutions from dealing in it. The absence of a trusted third party and AML/TF concerns drove authorities in these countries to take such measures. FinCEN regulations in the US are also referenced.

In summation, MasterCard recommends (1) that all transactions proceed through “regulated and transparent administrators subject to supervision by Australia authorities (rather than just the current block chain process),” (2) licensing for digital currency transmitters and (3) that consumer protections be established.