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As the cryptocurrency and blockchain industries continue to gain traction, global financial services giants Mastercard and Visa are both making strides in the space. Mastercard has unveiled a unique Web3 authentication solution, while Visa recently announced a stablecoin payment-focused project.
Mastercard Unveils Web3 Authentication Service
Mastercard has introduced a Web3 solution called “Mastercard Crypto Credential,” aimed at improving user verification standards and minimizing malicious activities within the digital asset ecosystem. The Mastercard Crypto Credential issues users a unique identifier, allowing them to instantly confirm that an address they wish to send funds to has been approved by Mastercard and adheres to the company’s guidelines.
In a video explanation shared on Twitter, the company emphasized its commitment to creating a method for Web3 and blockchain service providers that ensures secure transactions between users, verified in accordance with Mastercard’s standards.
The Mastercard Crypto Credential will issue users a distinctive identifier, theoretically allowing individuals to instantly confirm that an address they wish to send funds to has been approved by Mastercard and adheres to the company’s guidelines.
Mastercard stated that the solution also aims to facilitate compliance by exchanging essential metadata required to meet regulations, which should help “minimize the chances of malicious actors and the risk of funds being irretrievably lost.”
In cases where malicious parties obtain a unique identifier and are later found to have participated in harmful activities, Mastercard can swiftly revoke their verification.
A diverse group of partners supports the solution. For wallet integration, Mastercard has collaborated with Bit2Me, Lirium, Mercado Bitcoin, and Uphold. Blockchain partnerships include Aptos, Avalanche, Polygon, and Solana.
The company will also utilize CipherTrace’s suite of services, including CipherTrace Traveler, to assist in verifying addresses and ensuring compliance with the Travel Rule for international transactions.
Visa Announces Stablecoin Payment-Focused Project
Visa, a Mastercard competitor, also ventured into the crypto world this week. On April 24, Cuy Sheffield, Visa’s head of crypto, announced a new stablecoin payment-focused project on Twitter. Although the information is limited at this stage, Sheffield shared a job posting indicating that the company aims to “develop the next generation of products to enable commerce in everyone’s digital and mobile lives.” Visa is seeking a candidate with substantial experience in Web3 and blockchain technology.
Web3 refers to the forthcoming large-scale evolution of the internet, based on blockchains, which could grant users more control over their data. Visa has been working on creating products for this space for some time now.
“The Visa Crypto Team is developing the next generation of products to enable commerce in everyone’s digital and mobile lives,” the job posting stated. “Our focus is on creating intuitive features that reveal significant new value for our customers.”
The job listing, for a London-based engineer, calls for someone familiar with “the new Ethereum enhancements,” specifically mentioning ERC-4337, a standard for releasing tokens on the blockchain. Ethereum is the blockchain that underpins the second largest cryptocurrency, ETH. Last year, Visa released a paper suggesting potential collaboration with the Ethereum network on automatic payments.
The company also seeks a candidate experienced with “security protocols” and “private key custody.”
Past Initiatives and Future Outlook
Mastercard has consistently increased its presence in the cryptocurrency sector over recent years. Its latest announcement comes on the heels of the launch of a nonfungible token (NFT) musician accelerator program, developed in partnership with Polygon. This program provided Mastercard’s Music Pass NFT holders with complimentary access (until the end of April) to resources, distinctive AI tools, and other experiences.
In June 2022 Mastercard revealed collaborations with several non-fungible token (NFT) marketplaces to integrate its payment network into the Web3 sphere, allowing clients to buy NFTs using their credit or debit cards. Such NFT platforms as Candy Digital, The Sandbox, Spring, Nifty Gateway, and Immutable X were among the partners joining forces with Mastercard.
Visa seemed to scale back its crypto efforts after the exchange and crypto brand FTX collapsed in November. The firm had planned to launch crypto debit cards in 40 new countries as part of a “long-term global partnership” with FTX, but halted its efforts when FTX failed.
In February, Visa acknowledged that “fiat-backed digital currencies running on public blockchains have the potential to play a significant role in the payments ecosystem,” despite the challenges and uncertainties in the crypto landscape.
Last year, Visa also submitted trademark applications that hinted at possible plans for a crypto wallet and a metaverse product. However, a Visa spokesperson told Decrypt in February that recent high-profile failures in the crypto sector serve as an essential reminder that “we have a long way to go before crypto becomes a part of mainstream payments and financial services.”
As Mastercard and Visa continue to embrace Web3 and cryptocurrency technologies, their efforts signal the increasing acceptance of digital assets within the financial services industry. With these initiatives being in progress, it is likely that more companies will follow suit and further explore the potential of blockchain and cryptocurrency solutions.