New service utilizes CipherTrace technology to ensure compliance in cross-border transactions
AUSTIN, Texas — Mastercard (MA) has announced the launch of its Crypto Credential service, a solution designed to verify and ensure compliance in transactions between users’ wallets, with an initial focus on cross-border transfers of digital assets. The announcement was made by Raj Dhamodharan, Executive Vice President of Cryptocurrency and Blockchain Products at Mastercard, during his speech at Consensus 2023.
The Mastercard Crypto Credential service, which employs technology from blockchain analytics platform CipherTrace, aims to make transactions compliant with regulations such as the Financial Action Task Force’s (FATF) “travel rule.” Mastercard acquired CipherTrace in late 2021 to bolster its capabilities in the crypto compliance space.
Dhamodharan explained the challenges in ensuring compliance for cross-border transactions, stating, “If two people want to transfer value from one country to another country, the level of compliance and verification needed is complex. So how do you identify those wallets? And how do you exchange enough information about the other party?”
CipherTrace has been a pioneer in tracking cross-border transactions, developing a system to help companies comply with the FATF’s travel rule. This rule mandates that crypto service providers exchange personally identifiable information of both sender and recipient whenever a transaction involving over $1,000 in crypto occurs between the two parties.
To implement the new service, Mastercard has partnered with wallet providers Bit2Me, Lirium, Mercado Bitcoin, and Uphold, focusing initially on facilitating transfers between the U.S. and Latin America and the Caribbean. Dhamodharan also revealed plans to expand the service’s scope to include use cases such as non-fungible token (NFT) transactions.
In support of these future developments, Mastercard is collaborating with public blockchain network organizations Aptos Labs, Ava Labs, Polygon, and the Solana Foundation.