The multinational financial corporation Mastercard, which connects over 20,000 financial institutions in more than 200 countries, has introduced an innovative cross-border cryptocurrency transfer system. The Crypto Credential service is designed to simplify P2P cryptocurrency transactions while providing a higher level of security.
Service Overview
The Crypto Credential system allows for both domestic and international transactions. Its key feature is that users no longer need to enter complex blockchain addresses for transfers. Instead, simple aliases are used.
Despite the clear progress, experts point out that wallet compatibility remains an important issue. Those planning to transfer cryptocurrency are advised to first read guidelines on how to choose a crypto wallet. It’s worth noting that many devices for storing digital currencies support anywhere from dozens to thousands of different coins and tokens. For example, according to a review of the Trezor wallet, this hardware wallet supports over 1,600 cryptocurrencies.
Mastercard claims that replacing blockchain addresses with aliases simplifies the process of transferring crypto assets and minimizes the risk of losing digital assets due to address errors. Additionally, the developers assure that all necessary security standards are met, as well as compliance with global regulations, such as the FATF Travel Rule (Financial Action Task Force’s Transfer Monitoring Rules).
How It Works
First, Crypto Credential verifies users to ensure they meet Mastercard's standards. Once verified, users receive an alias (a short name) from the payment system.
When a user initiates a transfer, the Crypto Credential service checks the recipient’s alias for accuracy and verifies whether the recipient’s wallet supports the digital asset and blockchain of the transaction. If any of the parameters don’t match, the transaction is halted, and the sender is notified.
Mastercard stated that P2P transfers are just one of the possible uses for the service. Future applications could include NFTs, tickets, and more.
Where the Service is Available
The Crypto Credential system is currently available on several Latin American and European exchanges, including Bit2me, Foxbit Group, Lirium, and Mercado Bitcoin.
At present, the service is in a testing phase. Selected wallet holders can use Mastercard's Crypto Credential on a first-come, first-served basis. In the near future, the service will be accessible to more than 7 million users across 13 countries, including residents of 4 European countries (Spain, Portugal, France, Switzerland) and 9 Latin American nations (Argentina, Brazil, Guatemala, Mexico, Panama, Paraguay, Peru, Uruguay, and Chile). Mastercard plans to expand the service to additional European countries in the future.
Representatives of the cryptocurrency exchanges participating in the project have noted that partnering with Mastercard strengthens their position in the crypto market and allows them to monitor all blockchain transactions. Clients, in turn, gain more tools to manage their assets.
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