Mastercard introduces Crypto Credential, a service that allows you to make transactions in digital assets using aliases instead of addresses.
On May 29th, Mastercard announced the launch of the Crypto Credential pilot project, which allows users to make transactions in digital assets using aliases instead of traditional alphanumeric addresses. The service is currently available on several exchanges, including Bit2Me, Lirium, and Mercado Bitcoin.
Walter Pimenta, Executive Vice President of Product and Engineering for Latin America and the Caribbean at Mastercard, stated:
“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.”
How it works
The system developed by Mastercard simplifies interactions with different blockchains, verifying users’ identities and ensuring compatibility between digital assets and recipients’ wallets.
Initially, the exchange will verify a user’s identity according to Mastercard’s standards. At that point, the user receives an alias to send and receive funds on all exchanges supporting Crypto Credential. When a user initiates a transfer, Mastercard verifies that the recipient’s alias is valid and that the recipient’s wallet supports the digital asset and associated blockchain. If the recipient’s wallet does not support the asset or blockchain, the sender is notified through a notification, and the transaction does not proceed, avoiding potential loss of funds.
Mastercard Crypto Credential also supports the exchange of information in compliance with the Travel Rule. The Travel Rule is a regulation aimed at ensuring transparency and preventing illicit activities.
The system will initially be available to a selected group of users. Over the next few months, Mastercard plans to extend the system’s availability to over seven million users through participating exchanges.
The concerns
Despite Mastercard’s initiative aiming to simplify cryptocurrency transactions, some users have raised concerns about the centralization of the system. Crypto Credential requires Mastercard as an intermediary to verify users’ identities and control transactions, raising doubts about security and privacy. In the past, Mastercard has experienced several data breaches, exposing over 40 million accounts to hackers since 2005, due to attacks on its payment processing partners and retail clients.
