Mastercard acquires CipherTrace

Mastercard buy back CipherTrace, a crypto analytics company funded by the US Department of Homeland Security, to control compliance and AML in cryptocurrency transactions.

CEO Michael Miebach said during a regular financial briefing that Mastercard is interested in facilitating crypto investments and building its network compatible with a CBDC.

When asked about the sector, Miebach said: “Our online financial reporting conference cannot be without cryptocurrency. We've found that people actually invest significant amounts in crypto. So for an asset class with such a large space to grow, we think we have an obligation to make it easy for consumers to want to use it.”

Most recently, Mastercard partnered with digital asset platform Bakkt to help merchants, banks, and fintech companies in the United States capture and deliver crypto solutions and services to them.

Miebach noted that the best chance for cryptocurrencies to be used as a payment instrument would be through a central bank-issued digital currency. Mastercard will get its network ready to handle if this happens.

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“Government will test how? How will the government find a way to deal with the government and the bank? That's why they need us. We will provide a safe space for government and private banks to operate .”

Miebach added: “We can do the same thing with a privately issued. But we have very strict rules about when we can make a trade and when we can't.”

The acquisition of CipherTrace will be key to the company's growth in the crypto space.

Mastercard announced plans to acquire crypto analytics firm CipherTrace in September. The company says the acquisition will give it greater insight into the 900 cryptocurrencies currently analyzed by CipherTrade.

CipherTrade was founded in 2015 and provides around 7000 analytical reports for more than 150 banks, exchanges, financial institutions and senior regulators.

Previously, Eric Risley, a manager at Architect Partners, pointed out Mastercard's acquisition of CipherTrade is something financial services firms are now sure to do to build a presence in the crypto space.

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“What will CipherTrade take on? they will run compliance and AML in crypto transactions. We can't keep up with the times on our own because there are so many entities that are deeply involved in this space before. But the AML and compliance issues remain unresolved.”

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