24 June 2017
Visit cib.db.com

MasterCard makes first bitcoin investment

28 October 2015  |  13091 views  |  0 Bitcoin

MasterCard has finally dipped a toe in the crypto-currency pool, joining a host of other big name investors backing new bitcoin incubator Digital Currency Group (DCG).

MasterCard was joined by Canadian bank CIBC, insurer New York Life and venture capital firms TransAmerica Ventures and Bain Capital Ventures in DCG's funding round.  

“MasterCard has invested in DCG for the first-time," a MasterCard spokesperson told Finextra. "We believe they’re well placed to assess technologies in the digital currency and blockchain spaces.”

The investment suggests a change in strategy for MasterCard. In November 2014 it stated in a submission to the UK Treasury that the risks presented by digital currencies far outweigh the benefits. MasterCard was also sceptical of claims that digital currencies have low transaction costs.

"We would argue that, when compared to MasterCard's network, the claims pertaining to the speed and safety of digital currencies [do] not hold up, not least given that on average it takes 10 minutes for a block to be verified and that digital currencies are far more susceptible to hacking attacks."

The DCG is led by Barry Sibbert, whose first company, the SaaS investment platform SecondMarket, was recently acquired by Nasdaq Private Market. It claims to be one of the largest investment portfolios in digital currencies having backed 57 companies in 18 countries to date.

While Sibbert has welcomed the addition of the new investors, praising their long-term perspective and organisational and intellectual capital, he has also warned that any investment in digital currencies will take time to produce returns. 

"We are still far away from Bitcoin being a functional currency and I don’t think we’ve gotten closer lately. First it’s going to function as a speculative investment that will drive up the price and create a larger monetary base that will draw in Wall Street to trade it. Then more merchants will come on board. As it gets more liquid, as a [payment] rail it will become a real alternative to the existing money transfer systems in the world today.”

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

MasterCard bids to make everything a payment device

MasterCard bids to make everything a payment device

27 October 2015  |  11448 views  |  0 comments | 23 tweets | 25 linkedin
Nasdaq targets private company trading through SecondMarket acquisition

Nasdaq targets private company trading through SecondMarket acquisition

22 October 2015  |  3311 views  |  0 comments | 1 tweets | 5 linkedin
MasterCard extends startup search globally

MasterCard extends startup search globally

03 September 2015  |  9829 views  |  0 comments | 17 tweets | 8 linkedin
EU watchdogs take aim at MasterCard

EU watchdogs take aim at MasterCard

09 July 2015  |  7503 views  |  15 comments | 11 tweets | 11 linkedin
MasterCard takes controlling interest in remittances joint venture

MasterCard takes controlling interest in remittances joint venture

19 December 2013  |  5550 views  |  0 comments | 6 tweets | 7 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.response.ncr.comvisit wavestone-advisors.co.ukvisit www.finastra.com

Top topics

Most viewed Most shared
Live: EBAday 2017, day twoLive: EBAday 2017, day two
9058 views comments | 4 tweets | 5 linkedin
Worldpay pilots app-only mPOS for small retailersWorldpay pilots app-only mPOS for small re...
8921 views comments | 17 tweets | 27 linkedin
Live: EBAday 2017, day oneLive: EBAday 2017, day one
8251 views comments | 3 tweets | 4 linkedin
UK banks will need to change one million sort codes under ring-fencing rulesUK banks will need to change one million s...
7911 views comments | 8 tweets | 25 linkedin
What Banks and their customers can expect for the futureWhat Banks and their customers can expect...
6542 views comments | 7 tweets | 10 linkedin

Featured job

Six Figure Base + Commission + Stock Options
London

Find your next job