Mastercard patents a Cryptocurrency-Fiat hybrid payment system

Jul 20, 2018

Global credit and payments processor, Mastercard, has won a patent for consumer protection and payment transactions based on blockchain technology. The patent was published by the US Patent and Trademark Office (USPTO) earlier this week. It includes a new form of a public blockchain-based method for linking assets between blockchain and fiat currency accounts.


Mastercard patent

Titled “Method and system for linkage of blockchain-based assets to fiat currency accounts,” the new Mastercard patent attempts to address the long payment processing times of crypto-transactions. Mastercard have recognized the fact that cryptocurrencies have “seen increased usage over traditional fiat currencies by consumers who value anonymity and security.” However, it still lacks adoption because of long payment processing times. And this is where the company plans to bring its product into effect.



The new solution that Mastercard is developing will include a “plurality of account profiles". Each profile includes a "fiat currency amount, a blockchain currency amount, an account identifier and an address”, linked in a “central database”. To speed-up the processing time, the actual transaction would take place on the fiat system structure. Every transaction will be confirmed on the blockchain later on.

This combination of traditional payment systems with blockchain-based currencies “may provide consumers and merchants the benefits of the decentralized blockchain while still maintaining security of account information and provide a strong defense against fraud and theft". Mastercard, however, did not specify any cryptocurrency that this system would utilize.

Leveraging the existing fraud and risk algorithms and information that is available to payment networks, Mastercard also hopes that it's new system will allow the company to assess the likelihood of fraud and assess risk for blockchain transactions.


Mastercard's patent is a clear indication of a growing institutional interest in cryptocurrency and signals greater future adoption. Making fiat purchases with cryptocurrency would increase the demand and reputation of cryptocurrency, which has been slumping lately. However, it once again highlights the fact that time has ripen up for the introduction of faster blockchain networks. Slow networks are being the stumbling block for greater adoption of blockchain-based decentralized apps (DApp), and this needs to be overcome soon.

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