Mastercard and Borderless Partner to Pilot Identity Verification System for Cross-Border Stablecoin Transactions
Through Mastercard's Crypto Credential framework, the payment processing leader and Borderless are testing innovative approaches to enhance security and trust in international stablecoin transfer operations.
The global payment processing leader Mastercard has partnered with Borderless, a stablecoin orchestration network, to launch a pilot initiative that will investigate how the Crypto Credential standards-based framework developed by Mastercard can enhance confidence and security in international stablecoin payment transactions.
According to an announcement provided to Cointelegraph, the pilot program will evaluate the capacity of Mastercard's framework to tackle the obstacle of delivering assurance signals that stakeholders can integrate into their approval workflows, compliance procedures and risk management protocols.
The framework developed by Mastercard employs standardized protocols and assurance signals designed to introduce greater certainty into transactions conducted on blockchain networks. The pilot program aims to identify innovative governance signals capable of minimizing obstacles and friction in cross-border payment transactions involving stablecoins.
According to Kevin Lehtiniitty, CEO and co-founder of Borderless, compliance continues to represent one of the most significant sources of friction affecting stablecoin payment operations.
Correspondent banking solved this decades ago: originating compliance trusted downstream, no re-execution at every counterparty. Mastercard is applying that model to digital asset payments.
Kevin Lehtiniitty, CEO and co-founder of Borderless
In his comments to Cointelegraph, he explained that Mastercard's Crypto Credential will function as both a governance layer and verification layer, though Mastercard itself will not be involved in processing or settling funds during the course of the pilot program.
This pilot program represents Mastercard's most recent strategic move into the stablecoin sector, following closely on the heels of the payments giant's completion of its acquisition of BVNK, a stablecoin infrastructure company, on Monday, through a transaction with a reported value of $1.8 billion.
Earlier in June, Mastercard revealed its intentions to broaden its settlement capabilities to encompass intraday transactions, as well as weekend and holiday card settlement operations, with settlement services extending to stablecoins such as Circle's USDC, PYUSD issued by Paxos, USDG and USDP, RLUSD from Ripple and SoFi's SoFiUSD.