Mastercard is exploring ways to simplify cryptocurrency transactions, which will enable mass adoption of these digital assets in everyday business. The US-based card payments giant has introduced a new initiative to evaluate the use of its Crypto Credential program. The purpose of this program is to prevent people from sending cryptocurrency assets that are incompatible with their specific wallet. Cryptocurrency exchanges Bit2Me, Lirium, and Mercado have joined Mastercard to support this pilot. Cryptocurrency wallet player FoxBit has also joined the initiative.
Why did Mastercard launch this initiative?
Through its research, Mastercard has uncovered several instances of fraudulent cryptocurrency transactions. Complex wallet addresses or technical errors resulting from incorrect combination of cryptocurrency tokens with incompatible blockchains are one of the leading causes of financial loss to senders and recipients.
Mastercard is concerned that these risks could lead people to distance themselves from cryptocurrency-based financial transactions and stick with online payment apps like Venmo and PayPal.
“As interest in blockchain and digital assets continues to surge globally, we are enabling trusted and verifiable interactions across public blockchain networks,” said Walter Pimenta, Vice President of Products and Engineering at Mastercard. “It is essential that we continue to deliver.” Development.
What does this pilot program offer?
For transactions that will be processed as part of this program, Mastercard takes on a centralized role, acting as an intermediary to verify the user’s identity. The Company will conduct additional pre-checks before transactions are processed to ensure that the tokens being sent and the blockchain used to receive these funds are correct. As part of this pilot, Mastercard will store the KYC details of users processing transactions on its servers.
Exchanges that are part of this pilot program will first verify users and issue them a simple alias to send and receive funds on all supported exchanges.
“When a user initiates a transfer, Mastercard Crypto Credential verifies that the recipient’s alias is valid and that the recipient’s wallet supports the digital asset and associated blockchain. If the receiving wallet does not support the asset or blockchain, the sender will be notified and the transaction will not proceed,” Mastercard said in a statement.
According to Mastercard, the use of cryptocurrency credential P2P initiatives represents the scope to expand and support the global remittance market. Founded in 1966, Mastercard is currently valued at $411.33 billion (approximately Rs. 34,23,157 crore). In recent years, the company has shown a willingness to explore cryptocurrency and blockchain approaches to overhauling existing financial systems.
Last April, Mastercard launched a cryptocurrency credit card, CBDC partner program, and cryptocurrency trading plan. The company’s vision for its cryptocurrency credentials was first revealed in 2023.
However, it is worth noting that Mastercard continues to be compromised by hackers. According to Cointelegraph, 40 million Mastercard accounts have been compromised since 2005.
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