Today Mastercard unveiled a crypto identity solution, the Mastercard Crypto Credential. The first use case is for cross border transactions between the U.S., Latin America and the Caribbean that require a considerable amount of compliance.
Stepping back, there’s no compliance if one sends a p2p payment using cryptocurrency. The primary crypto transactions that require compliance are anything involving a cryptocurrency exchange.
At the Consensus event today, Mastercard’s Raj Dhamodharan discussed the potential for regulated institutions and governments to start using public blockchain. “All of them are looking for an identity approach to which wallets they can interact with, what kind of activities they can do in a compliant manner,” he said.
For this type of cross border transaction, one of the challenges is finding the person to whom you want to send the crypto, especially given wallet addresses are not user friendly. And the second challenge from a compliance point of view is making sure you know who they are. Mastercard is combining its existing identity experience with the crypto compliance skills it gained in acquiring Ciphertrace, including Travel Rule compliance.
So far, the Crypto Credential is collaborating with four wallets Bit2Me, Lirium, Mercado Bitcoin and Uphold. And it aims to support developers across multiple blockchains, starting with Aptos, Avalanche, Polygon and Solana.
Meanwhile, last year Mastercard launched Crypto Secure to enable card issuers to flag risky cryptocurrency exchanges. Plus, the company enables banks to offer crypto trading solutions to their customers through a partnership with Paxos. And it has leaned into web3, launching an accelerator and partnering with numerous NFT platforms.