Financial institutions are working together to test blockchain, but Mastercard is moving forward cautiously

Blockchain, the underlying technology of Bitcoin, is the most exciting field of technology right now.

It has the potential to save businesses a lot of administrative costs, and financial companies are particularly keen. We have seen financial companies around the world joining this field, either by signing cooperation agreements to jointly experiment with blockchain technology or through direct investment.

MasterCard, the world's leading payment company, has also not fallen behind and has been closely following the development of this field. It invested in the Bitcoin startup Digital Currency Group at the end of last year.

Garry加里•莱昂斯, Chief Innovation Officer, Mastercard

Garry加里•莱昂斯, Mastercard's chief innovation officer, recently told Business Insider during an interview at the World Economic Forum in Davos, Switzerland, that Mastercard is "very, very interested" in blockchain technology. But he also noted that Mastercard will be more cautious than its peers in this regard, using the word "blindsided," meaning that if something goes wrong, they don't want to be caught unprepared.

Lyons said:

Like many other companies around the world, we are very interested in how blockchain technology will develop, which is one of the reasons why we invested in DCG.

As for the main reason for investing in DCG, Lyons said: "There are 15 venture capital firms or companies involved in the investment in DCG. I believe they have chosen the right direction, so it is also the right time for us to participate in this field and see how people are experimenting with this technology.

"It's not just the industry that's excited about blockchain technology, it's the world, everyone. Even at this Davos Forum, when I mentioned blockchain in every technology discussion group, some people would say 'it's better than the old one.' But while we are interested in blockchain, we also have to be cautious. We definitely don't want, and I don't think anyone wants to blindly rush into this field and be caught off guard when something goes wrong."

The global head of KPMG's cybersecurity practice told Business Insider that he's concerned that many businesses are embracing new technologies like blockchain too quickly without considering the security implications.

Blockchain is the industry's name for the underlying technology of Bitcoin. It uses complex cryptography and distributed ledgers (many copies of records scattered in different places) to standardize and record, and was originally used to implement Bitcoin transactions.

If you pay someone in pounds, the bank has to contact other banks to tell them to update their account balances. Then, at the end of the day, a bunch of transactions flow between banks through an intermediary to make sure the customer's account balance is correct.

If you use blockchain, you can reduce the hassle mentioned above. You only need to send money directly to the other party's digital wallet. This is the novelty of blockchain in protecting record security, making safe and fast remittance possible.

Banks hope to adapt this technology to trade directly with each other, improve the efficiency of transactions and reduce the cost of transactions. To do this, it involves using the Bitcoin blockchain, or building a similar system - a private blockchain.

The R3 blockchain consortium announced on Wednesday that it had completed its first distributed ledger experiment, with 11 of its member banks conducting transactions on a new platform based on the Ethereum blockchain.

So what does MasterCard think of the alliance?

Lyons said:

“For blockchain technology to achieve wider dissemination and adoption, regulation and investment are needed.”

“R3’s approach to experimenting with blockchain technology is interesting, as it brings together multiple parties interested in blockchain. This is a great opportunity for banks, as groups can be more successful than experimenting alone.”

Original article: http://uk.businessinsider.com/mastercards-garry-lyons-davos-fintech-mastercardlabs-blockchain-bitcoin-2016-1
By Lianna Brinded
Translator: printemps
Editor: printemps
Source (translation): Babbitt Information (http://www.8btc.com/mastercard-blockchain)