On 29 May 2024, Mastercard, the global payment processing giant, announced the launch of its Crypto Credential pilot program, which aims to streamline peer-to-peer (P2P) transactions in the cryptocurrency space. Mastercard says the first real-world application of this technology has gone live, allowing users to send and receive crypto using simplified aliases instead of the often lengthy and complex blockchain addresses.
Mastercard has partnered with several crypto exchanges, including Bit2Me, Lirium, and Mercado Bitcoin, to enable secure blockchain transactions between Latin American and European corridors. Users in 13 countries, including Argentina, Brazil, Chile, France, Guatemala, Mexico, Panama, Paraguay, Peru, Portugal, Spain, Switzerland, and Uruguay, can now reportedly conduct cross-border and domestic transfers across multiple currencies and blockchains.
Mastercard claims that its Crypto Credential serves as a verification tool for interactions between consumers and businesses on blockchain networks. By ensuring that users meet a set of verification standards and confirming that the recipient’s wallet supports the transferred asset, Mastercard says its Crypto Credential aims to build trust and certainty in these transactions. The company also states that the exchange of metadata eliminates the complexity of determining which assets or chains are supported by the recipient, streamlining the process and reducing the risk of lost funds.
Furthermore, Crypto Credential supports the exchange of Travel Rule information for cross-border transactions, ensuring compliance with regulatory requirements designed to prevent illegal and illicit activities. This feature, according to Mastercard, is crucial in building confidence among users and regulators alike.
While the current focus is on P2P transactions, Mastercard suggests that its Crypto Credential has the potential to support a wide range of use cases, including NFTs, ticketing, and other payment solutions, depending on market demands and compliance requirements.
According to the press release, the process involves exchanges first verifying users under Mastercard Crypto Credential standards, granting them an alias for sending and receiving funds across all supported exchanges. When initiating a transfer, Crypto Credential verifies the validity of the recipient’s alias and confirms that their wallet supports the digital asset and associated blockchain. If the receiving wallet is incompatible, the sender is notified, and the transaction is halted, protecting all parties from potential losses.
Industry experts quoted in the press release have praised the initiative, with Walter Pimenta, executive vice president of Product and Engineering for Latin America and the Caribbean at Mastercard, emphasizing the company’s dedication to bringing safe, simple, and secure payments to the forefront:
“Mastercard continues to invest in its technology, standards and partnerships to bring safe, simple and secure payments to the forefront. As interest in blockchain and digital assets continues to surge in Latin America and around the world, it is essential to keep delivering trusted and verifiable interactions across public blockchain networks. We’re thrilled to work with this dynamic set of partners to bring Mastercard Crypto Credential closer to realizing its full potential.”
Partners such as Bit2Me, Foxbit Group, Lirium, and Mercado Bitcoin have expressed their enthusiasm for collaborating with Mastercard to drive payment alternatives and enhance the user experience in the dynamic world of cryptocurrencies.
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