Mastercard Integrates AI Tool to Tackle Crypto Crimes

Mastercard has recently declared that the firm is incorporating a new AI tool as a way to detect and stop fraudulent activities taking place via cryptocurrency exchanges. The digital payment processing firm has reported that it has signed up for a new partnership with an AI firm called Feedzai.

Mastercard officials informed the media that the venture will amp up the ability of the firm to detect and stop fraudulent transactions that are taking place through cryptocurrency exchange platforms.

Feedzai is directly implemented on the CipherTrace Armada Platform. This is a banking tool that helps the firm supervise transactions generated through thousands of exchange platforms. The tool will assist the digital payments processing platform in highlighting fraudulent transactions and any suspicious activities.

This is AI software that was created to identify and block questionable trades in nanoseconds. Data generated from Feedzai indicates that around 40% of scam transactions are processed directly through bank accounts and crypto trading platforms.

Scope and Functionality of Feedzai

Nuno Sebastio is one of the co-founders and CEO of Feedzai. He told the media that this technology is going to improve fraud detection protect consumers and alert the authorities about any illegal financial activities such as money laundering or mule accounts.

Sebastio explained that there are many banks that are only preventing illegal crypto transactions but they are not covering bad actors operating outside of the scope of recognized and regulated entities.

This is not the first time, Mastercard is working with AI. The firm also collaborated with an AI-powered tool in July. This development allowed the firm to detect banking frauds and payment frauds that intercept real-time transactions. Mastercard has also foryed in Web3 and digital currency markets.

The firm has launched Mastercards for cryptocurrency exchanges such as Binance and Nexo. On the other hand, the firm is also conducting CBDC trials. Mastercard is partnering with Reserve Bank of Australia and Digital Finance Cooperative Research Centre for CBDC pilots.

CBDC Adoption to Face Challenges

Mastercard’s head of blockchain and digital assets for Asia-pacific region Ashok Venkateswaran recently told media that the adoption of CBDCs could be difficult. He claimed that the consumers of today are more comfortable using the digital type of money therefore there are not many unique use cases for CBDCs.

He further noted that use and implementation of CBDC networks makes more sense for nations where the local payments networks are not very robust. He was speaking at the FinTech Festival of Singapore on Wednesday.

On the other hand, International Monetary Fund has claimed that CBDCs are secure and cost-effective alternative to cash. At present, around 60% of sovereign nations in the world are developing and testing native CBDC solutions. Nevertheless, only 11 nations have adopted digitized version of their legal tender.

On the other hand, the report from Atlantic Council has revealed that 53 nations are in advanced planning stage whole 46 are conducting research. Mastercard announced completion of CBDC testing for Hong Kong Monetary Authority that will allow the region to issue products such as e-HKD and Hong Kong electronic dollars.

The project dubbed as CBDC sandbox has conducted testing for minting, distributing, and using e-HKD in transactions at a local scope.