MasterCard announced the launch of the MasterCard Crypto Credential, a service aiming to make crypto transfers easier and less complex. This service will enable users to send and receive crypto using their aliases instead of typing out long and complex blockchain addresses, a problem that has seen millions of dollars lost during transactions.
According to the team, the solution is already enabled on various exchanges, including Bit2Me, Lirium and Mercado Bitcoin exchanges, as well as new additions such as Foxbit, a crypto wallet provider and Lulubit, which is integrated with Lirium. The service will be piloted in Latin America and Europe with more countries set to be added in the coming months.
“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,” said Walter Pimenta, executive vice president of Product and Engineering, Latin America and the Caribbean at Mastercard. “We’re thrilled to work with this dynamic set of partners to bring Mastercard Crypto Credential closer to realizing its full potential.”
Starting this June, users in Argentina, Brazil, Chile, France, Guatemala, Mexico, Panama, Paraguay, Peru, Portugal, Spain, Switzerland and Uruguay can send cross-border and domestic transfers across multiple currencies and blockchains.
Praising the move by MasterCard, Thor Abbasi, Co-Founder of Zivoe, a Real World Asset protocol aiming to offer affordable credit access, stated the move will be a “significant step towards broader crypto adoption” while enabling financial inclusion to the unbanked and underbanked.
“Traditional finance incumbents like Mastercard are continuing to recognize that the future of finance will be on-chain,” Abbasi added. “This further validates our approach at Zivoe to leverage blockchain technology to expand more affordable credit access, and we look forward to the positive impact this development will have on the broader blockchain community.”
The service launch has been in the pipeline since its announcement at Consensus in 2023, marking the first real-world crypto application by the major money transfer service. Adding to trust and certainty in transactions, the MasterCard Crypto Credential service aims to expand and support the domestic and cross-border remittance market. This will boost the adoption of crypto across the globe, allowing the very basic crypto users to send value across a simplified and safe channel.
Speaking on the launch of MasterCard Crypto Credential, Mark Smargon, CEO and Founder of Fuse, a low-cost global payments platform aiming to join the service stated:
“It seems like major incumbents like Visa and Mastercard are looking to leverage their proprietary data and utilize their existing relationships with customers and merchants with web3 payments.”
Expanding global crypto payments and remittances
The MasterCard Crypto Credential helps verify interactions among consumers and businesses using blockchain networks. The service will ensure that the user has met a set of verification standards and that the wallet they are sending crypto is the right recipient address and correct blockchain.
The associated exchanges will verify the user under a set of predefined set of Mastercard Crypto Credential standards. Once verified, the user obtains an alias that they can use to send or receive crypto to their wallet. This is possible via the exchange of metadata which reduces the complexity of sending or receiving crypto. The service ensures the funds are being sent to a recipient’s wallet that supports the assets they are sending, which breeds trust and certainty in the transaction.
If the receiving wallet does not support the asset or blockchain, the sender is notified and the transaction does not proceed, protecting all parties from the potential loss of funds.
“By replacing their own settlement layer with a blockchain they give up on their current business model but are able to capture more value,” Smargon added. “Blockchains have a potential to scale beyond credit-card payments.”
MasterCard Crypto Credential focus on compliance
The service will kick off in Latin America and Europe, with compliance with crypto laws being paramount for the service. The solution supports the exchange of Travel Rule information for cross-border transactions, which is a regulatory requirement to ensure transparency and prevent potentially illegal and illicit activities.
At its launch, only a few exchanges and users will pilot the service across Latin America and Europe on a first-come, first-serve basis. Once globally launched, more than 7 million users across accredited exchanges will access the service, allowing them to seamlessly transfer crypto across the globe.
Following the launch, MasterCard also announced plans to launch other similar services for NFTs, ticketing and other payment solutions in the future.
