Mastercard presents a new initiative to simplify crypto transactions and limit user errors

Mastercard is exploring ways to streamline crypto transactions, which could lead to mass adoption of these digital assets for everyday activities. 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 ensure that people do not send crypto assets that are incompatible with certain wallets. Cryptocurrency exchanges Bit2Me, Lirium and Mercado have been brought on board by Mastercard to assist in this pilot project. Crypto wallet player FoxBit has also joined the initiative.

What drove Mastercard to launch this initiative?

Through its research, Mastercard has noted several cases of erroneous crypto transactions. Complicated wallet addresses or technical errors caused by using crypto tokens with incorrect and incompatible blockchains have emerged among the main reasons leading to financial losses for senders and recipients.

Because of these risks, Mastercard fears, people may stay away from cryptocurrency-based financial transactions and get stuck in online payment apps like Venmo and PayPal.

“As interest in blockchain and digital assets continues to increase around the world, it is essential that we continue to provide trustworthy and verifiable interactions across public blockchain networks,” said Walter Pimenta, executive vice president of product and engineering by Mastercard. cited as if commenting on the development.

What will this pilot program offer?

For transactions that will be processed under this program, Mastercard will take on a centralized role and act as an intermediary to verify the user’s identity. The company will carry out further pre-checking of transactions before they are processed to ensure that the tokens sent and the blockchain used to receive these funds are correct. Mastercard will store the KYC details of users processing transactions as part of this pilot within its servers.

Exchanges that are part of this pilot will first verify a user and issue 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 is notified and the transaction does not proceed,” Mastercard She said in his statement.

According to Mastercard, the use of its P2P initiative of cryptographic credentials represents the scope to expand and support the global remittance market. Founded in 1966, Mastercard today has a valuation of $411.33 billion (approximately Rs. 34,23,157 crore). In recent years, the company has shown an inclination to explore the avenues of cryptocurrencies and blockchain to revamp existing financial systems.

In April, Mastercard launched a crypto credit card, CBDC Partner ProgramAND cryptocurrency trading initiatives. The company’s crypto credential vision was first unveiled in 2023.

However, it is notable that Mastercard has been repeatedly hacked by hackers. According to CoinTelegraph, 40 million Mastercard accounts have been hacked since 2005.

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