- Mastercard CEO Ajay Banga has argued that Bitcoin’s volatility makes the financially excluded “scared.”
- His comments follow a year in which Bitcoin’s price has gone from less than $5,000 to over $13,000.
- Banga said that central bank digital currencies could help improve the efficiency of cross-border trade flows.
Bitcoin (BTC) is often touted as a tool that can help promote financial inclusion, but its innate price and value fluctuations are just too volatile for it to be useful to the unbanked, according to Mastercard CEO Ajay Banga.
Speaking at the Fortune Global Forum conference, Banga said that “Bitcoin per se is volatile in its valuation.” He added, “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.”
Bitcoin’s volatility in 2020
Banga’s comments follow a year in which Bitcoin’s price has swung wildly between less than $5,000 in March to over $13,000 today. Such unpredictability can bamboozle even a seasoned trader, let alone users who have little to no experience with any financial instruments.
On the other hand, the Mastercard CEO isn’t downplaying the usefulness of digital money in general. Indeed, Mastercard itself has teamed up with crypto-native payments platform Wirex to offer payment cards that support digital currencies.
According to Banga, the potential introduction of central bank digital currencies (CDBCs) could help improve some aspects of the financial sector.
“Fiat currencies, if they were to go digital, would they be helpful in cross-border trade flows and improving the efficiency of those—yes, for sure,” Banga said.
Many central banks around the world are currently considering their own CBDCs. Just recently, the Bank of Japan deepened its research into a digital Yen and said that it’s interested in hearing the general public’s opinion on the topic.
Jerome Powell, chairman of the US Federal Reserve, also reported last week that around 80% of central banks are exploring the idea of launching a CBDC.