According to a press release from Trade Arabia, July 30, 2019, Mastercard and the Bahrain Electronic Network for Financial Transactions (Benefit), the only financial network in the Kingdom of Bahrain handling ATM and POS transactions, have established a partnership to provide a blockchain solution for banks to enable cross-border commercial payments.
Bahrain Adopts Blockchain
The Kingdom of Bahrain is an island country in the Persian Gulf and is composed of a small archipelago centered around Bahrain Island, situated between the Qatar peninsula and the northeastern coast of Saudi Arabia. Even if we are talking about a micro-nation, the capital of Bahrain, Manama, is home to many large financial structures and, in 2008, the country was named the world’s fastest-growing financial center by the City of London’s Global Financial Centres Index. In particular, the nation’s banking and financial sector has benefited from the boom in oil demand.
The country is also on the path to becoming a smart economy to promote the development, sustainability, and attractiveness for new investment such as blockchain technologies. Precisely for this reason, Bahrain Electronic Network for Financial transactions (Benefit), the only financial network of its kind in the country which handles ATM and POS transactions among other services, has entered into a partnership with Mastercard to create a private cross-border commercial payment solution for banks.
MasterCard has been reportedly working on implementing blockchain into their existing infrastructure for a number of years. However, they are not the only major company adopting the technology.
IBM was the first Fortune 500 company to announce that it had begun facilitating payments between banks over its proprietary blockchain in the South Pacific region.
The company is currently limiting its blockchain access to merchants and banks as part of their pilot program. As with all companies hedging their bets on the technology, it is clear that they ultimately wish to expand its availability to the general public. But for now, only B2B companies can have a taste of MasterCard’s blockchain.
Mastercard started offering access to their blockchain technology in October 2017 as an alternative to conventional methods of transactions but it’s the first time that it will begin a program in the Middle East. The use of Mastercard’s cross-border B2B service comes with different advantages for both the B2B world and financial institutions with higher transaction speeds, transparency, and the removal of third parties to complete payments
According to Benefit CEO, Abdulwahed Al-Janahi, this partnership will improve the international remittance systems confirming Bahrain’s position as a leading international fintech hub.
“The project fits with the national agenda of implementing innovative products based on new technology such as Blockchain. We also thank Mastercard and value the support we have from the Central Banks of Bahrain (CBB) and the Economic Development Board (EDB).”
Mastercard Strides Towards Blockchain
As the payments space is fundamentally changing, industry leaders want to ensure their future relevance. For this reason, Mastercard has filed multiple blockchain-related patents over the past two years and also recently invested in Facebook’s new Libra project.
Currently, Mastercard holds various Blockchain-related patents including an identity verification patent, a patent for anonymous transactions and a system that links cryptocurrency with fiat accounts.
However, despite the progress that the company has made, it is apparent that there is still ongoing research into this sector and results are yet to be seen.