Payment giant Mastercard announced on May 29 that it is testing peer-to-peer (P2P) transactions on the blockchain, aiming to facilitate cross-border payments and domestic transfers in different currencies for users in Latin America and Europe.
As a major player in the traditional financial industry, Mastercard has been embracing Web3 and exploring central bank digital currencies (CBDCs), distributed ledger technology, tokenized assets, and more.
In a recent announcement, Mastercard introduced its basic infrastructure for peer-to-peer (P2P) transactions, called Mastercard Crypto Credential. This infrastructure allows users in Latin America and Europe to easily and securely conduct cross-border remittances and domestic transfers on the blockchain. The feature is currently in the trial phase.
Mastercard stated that the P2P trial transactions are conducted in collaboration with Bit2Me, Lirium, and Mercado Bitcoin exchanges, enabling users in Latin America and Europe to utilize blockchain for cross-border remittances and domestic transfers. The countries currently supported include Argentina, Brazil, Chile, France, Guatemala, Mexico, Panama, Paraguay, Peru, Portugal, Spain, Switzerland, and Uruguay.
Walter Pimenta, Vice President of Product and Engineering for Mastercard in Latin America and the Caribbean, stated:
According to the official description, Mastercard Crypto Credential allows users of cryptocurrency exchanges to send and receive cryptocurrencies through their cryptographic credential aliases, rather than using long and complex blockchain addresses. These aliases are personalized addresses, similar to the vanity addresses provided by the Ethereum Name Service (ENS) on the Ethereum network.
The workflow of the Crypto Credential is as follows: Firstly, exchanges adopting the platform will verify users based on the Mastercard Crypto Credential standard. Users will then receive an alias to facilitate fund transfers across all supported exchanges. When initiating a transfer, the Mastercard Crypto Credential will verify the validity of the recipient’s alias and the compatibility of their wallet with the desired digital assets and associated blockchain. If the recipient’s wallet does not support the asset or blockchain, the sender will be notified and the transaction will be temporarily suspended to prevent any loss of funds.