All about Mastercard’s new ‘Crypto Credential’ service

• Mastercard launches a peer-to-peer network for cross-border digital asset transfers.
• The P2P network, known as Mastercard Crypto Credential, will cater to users in Europe and Latin America.

Mastercard has introduced the Mastercard Crypto Credential on 29th May, making cryptocurrency transactions by allowing users to send and receive crypto using simplified aliases instead of complex blockchain addresses.

Mastercard dips its toes further into crypto

Mastercard Crypto Credential verifies interactions between consumers and businesses on blockchain networks, ensuring that users meet verification standards and confirming the recipient’s wallet supports the transferred asset.

This system enhances trust and certainty in transactions by simplifying the process of knowing which assets or chains the recipient supports.

Additionally, Mastercard Crypto Credential facilitates the exchange of Travel Rule information for cross-border transactions, a regulatory requirement to prevent illegal activities.

The system operates by first verifying users according to Mastercard’s standards, who then receive an alias for sending and receiving funds across supported exchanges.

When initiating a transfer, the system checks the validity of the recipient’s alias and wallet compatibility. If the wallet does not support the asset or blockchain, the sender is notified, and the transaction halts to prevent loss of funds.

Mastercard will initially support peer-to-peer (P2P) transactions but may extend the service to non-fungible tokens (NFTs), ticketing, and other payment solutions.

The service targets the Latin American and European markets, available in countries including Argentina, Brazil, Chile, France, Guatemala, Mexico, Panama, Paraguay, Peru, Portugal, Spain, Switzerland, and Uruguay.

The service is available on three main exchanges: Bit2Me, Lirium, and Mercado Bitcoin. Users of Lulibit, a Panama and Guatemala-based exchange, can also access the service via Lirium. Brazil-based crypto wallet provider Foxbit is also participating in the pilot ecosystem.

Mastercard plans to offer Crypto Credential to select users on a first-come, first-served basis and then extend the service to more than 7 million users in the coming months.

A blast from the past

This initiative follows Mastercard’s earlier venture into the crypto space. On 12th October, 2023, Mastercard announced a solution to enable the tokenization  of Central Bank Digital Currencies (CBDCs) across various blockchains.

This technology bolsters security and allows consumers to participate in commerce across multiple blockchains.

It was part of the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre’s (DFCRC) central bank digital currency pilot project, aimed at exploring potential use cases for a CBDC in Australia.