Mastercard introduces Crypto Credential Alias

Mastercard? Bild von Braden Kowitz via flickr.com. Lizenz: Creative Commons

The Major Credit Card Provider Officially Launches Its Alias System for Exchanges and Wallets. Initially, It Will Serve the Corridor from Latin America to Europe. But What’s Truly New About It?

The credit card provider Mastercard has long been engaged with cryptocurrencies and the potential of crypto and blockchain for its business. With the so-called Crypto Credential Aliases, its biggest project to date officially goes live.

Mastercard introduces an alias system: The Crypto Credentials are meant to replace addresses with easier-to-remember names. This way, instead of sharing the long and complicated blockchain addresses known from Bitcoin and Ethereum, one can initiate a payment as conveniently as with PayPal.

However, such alias systems are anything but new. There are already countless examples out there, like ENS, PayMail, OpenAlias, PayID, FIO, and many more. The idea addresses an obvious weakness of cryptocurrencies and is almost as old as Bitcoin itself. However, no system has yet managed to catch on in the market for reasons that are not entirely clear.

A Bonus and the Big Name

In itself, Mastercard’s Crypto Credentials also seem like just another, neither too exciting nor promising alias project. However, the credit card provider does add a bonus to the pure alias: “The exchange of metadata eliminates the complexity of a user needing to know which assets or chains are supported by the recipient.”

Indeed, the exchange of addresses and tokens has become somewhat confusing in a world of multiple blockchains. Through metadata, the users of Crypto Credentials can now know if the recipient accepts a certain asset, which could be a major convenience.

The second advantage, of course, is Mastercard itself. Mastercard is a big name and, thanks to this alone, manages to convince other players to join the project. When Mastercard knocks, people open the door. So far, the exchanges Bit2Me, Lirium, and Mercado Bitcoin have integrated the credentials. Wallets Foxbit and Lulubit are on standby.

Mastercard initially aims to cover the corridor between Latin America and Europe, specifically: virtually all Latin American countries from Mexico to Chile and the European countries Portugal, Spain, Switzerland, and France.

But It Doesn’t Come Without a Catch

Of course, the Crypto Credentials are not free. Everything comes at a price, especially when Mastercard is involved. The Crypto Credentials do work with non-custodial wallets, where the user holds their keys. Yet, Mastercard also introduces some regulation through them.

To obtain the credentials, one apparently has to verify through the exchange according to Mastercard’s standards. During the transfer, the credentials „support the exchange of ‚Travel Rule‚ information for cross-border payments.“ The press release leaves open whether this is optional or mandatory, whether Mastercard supports or enforces it.

Those who comply still receive an alias with which they can receive money on the participating exchanges, regardless of the asset or blockchain. When a user sends money, Mastercard’s system checks whether the receiving wallet supports the coin and chain.

The system is practical and convenient for most users: Instead of asking each time on which exchange the crypto address for the corresponding asset is, one simply sends the easy-to-remember alias. This certainly simplifies many things.

Initially, a selected group of users will enjoy the credentials. Over the coming months, they will be offered to all seven million users of the participating exchanges.

The transactions between Latin America and Europe are just one of many possible use cases for the credentials. Mastercard also mentions NFTs, tickets, and other payment solutions, depending on the market and requirements.