MasterCard has announced the launch of MasterCard Crypto Credential, which is designed to make cryptocurrency transfers easier and less cumbersome, and will enable users to send and receive cryptocurrencies using their own aliases without having to type in long, complicated blockchain addresses.

The solution is already enabled on a number of exchanges, including the Bit2Me, Lirium and Mercado bitcoin exchanges, as well as newcomers such as cryptocurrency wallet provider Foxbit and Lulubit, which integrates with Lirium, the team said. The service will be piloted in Latin America and Europe, with more countries to be added in the coming months.

Walter Pimenta, executive vice president of product and engineering for MasterCard Latin America and the Caribbean, said, "As interest in blockchain and digital assets continues to surge in Latin America and around the world, it is critical to consistently provide trusted and verifiable interactions on public blockchain networks."

Starting this June, users in Argentina, Brazil, Chile, France, Guatemala, Mexico, Panama, Paraguay, Peru, Portugal, Spain, Switzerland, and Uruguay will be able to make cross-border and domestic transfers via multiple currencies and the blockchain.

Thor Abbasi, co-founder of Zivoe, a real-world asset protocol company that aims to provide affordable credit services, hailed the move as one that will be "an important step towards wider adoption of cryptocurrencies" while also providing inclusive financial services to the unbanked and underbanked.

He added: "Traditional financial companies like Mastercard are increasingly recognising that the future of finance will be on-chain finance. This further validates our approach at Zivoe to utilise blockchain technology to expand access to more affordable credit and look forward to the positive impact this development will have on the wider blockchain community."

The service, which has been in the pipeline since it was announced at Consensus 2023, marks the first real-world application of cryptocurrencies by a major remittance service. The MasterCard Crypto Credentials service aims to increase trust and certainty in transactions, expanding and supporting the domestic and cross-border remittance markets. This will facilitate the global adoption of cryptocurrencies, enabling the most basic cryptocurrency users to send value through a streamlined, secure channel.

Commenting on the launch of Mastercard Cryptocurrency Vouchers, Mark Smargon, CEO and founder of Fuse, a low-cost global payments platform aiming to join the service, said, "The launch of Mastercard Cryptocurrency Vouchers will open up new opportunities in the global cryptocurrency market."

Expanding Global Crypto Payments and Remittances

Mastercard Cryptocurrency Voucher helps to verify interactions between consumers and businesses using the blockchain network. The service will ensure that users meet a set of authentication criteria and that the wallet to which they send cryptocurrencies is the correct recipient address and the correct blockchain.

The exchange in question will validate the user against a set of predefined MasterCard cryptocurrency credential criteria. Upon passing verification, the user will be given an alias that can be used to send or receive cryptocurrency to or from their wallet. This can be achieved by exchanging metadata, thus reducing the complexity of sending or receiving cryptocurrencies. The service ensures that funds are sent to the recipient's wallet that supports the asset being sent, thus increasing trust and certainty in the transaction.

If the recipient wallet does not support the asset or blockchain, the sender will be notified and the transaction will not proceed, thus protecting all parties from potential loss of funds.

Smargon added: "By replacing their own settlement layer with blockchain, they give up their existing business model, but capture more value." Blockchain has the potential to go beyond credit card payments."

MasterCard Crypto Credentials Focuses on Compliance

Compliance with crypto laws is a top priority for the service, which will launch in Latin America and Europe. The solution supports the exchange of travel rule information for cross-border transactions, a regulatory requirement to ensure transparency and prevent potentially illegal activity.

At launch, only a small number of exchanges and users will pilot the service in Latin America and Europe on a first-come, first-served basis. Once rolled out globally, the service will be available to more than seven million users on accredited exchanges, enabling them to seamlessly transfer cryptocurrencies across the globe.

MasterCard also announced plans to launch other similar services in the future, including NFTs, ticketing and other payment solutions.