Mastercard has launched a new service designed to help banks identify fraud across crypto exchange platforms.
Crypto Secure uses artificial intelligence to help banks determine how likely it is that a crypto exchange on the Mastercard network is connected to fraud activity and allow them to act accordingly.
The new platform expands on existing tech supplied to banks to deal with fiat currency fraud, following Mastercard’s acquisition of CipherTrace, a blockchain security startup, in September 2021.
Protecting consumer crypto
Ajay Bhalla, Mastercard’s President of Cyber and Intelligence Business, has claimed that the new platform is an effort to engender trust in “digital asset transactions.”
“The idea is that the kind of trust we provide for digital commerce transactions, we want to be able to provide the same kind of trust to digital asset transactions for consumers, banks and merchants,” he told CNBC (opens in new tab).
Until meaningful regulations on the cryptocurrency market are passed by international governments, this may be the most confident step that any large financial company has taken to protect those looking to embrace crypto, and may increase consumer confidence in the technology.
Certainly, cryptocurrency looks to be gaining legitimacy amongst governments and financial institutions alike.
In September 2022, President Biden’s executive branch released a framework (opens in new tab)that hopes to see cryptocurrency transactions become easier in the US while reducing instances of fraud, while in the same month, Nasdaq announced (opens in new tab) it will begin to offer custody services to “institutions dipping their toes into cryptocurrency”.
Meanwhile, the European Union hopes its own new legislation (opens in new tab), announced in June, will end the “Wild West of crypto assets.”
That “wild west”, and a persistent economic downturn, mean that Bitcoin, the largest cryptocurrency, no longer enjoys the strong value it once had – currently hovering precariously around the $19,000 mark per coin, and defying predictions of a price hike.
While governments step into gear, the movement of established financial institutions and services into the crypto space is welcome. These combined initiatives could, if sustained, revitalise its fortunes.