The MasterCard logo on a smartphone arranged in Saint Thomas, Virgin Islands.
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Mastercard has agreed to acquire CipherTrace, the start of blockchain analysis, with the latest sign of how major companies are heating up in cryptocurrencies.
The payment giant said Thursday it signed an agreement to buy CipherTrace for an undisclosed amount. Headquartered in Menlo Park, California, CipherTrace develops tools that help businesses and law enforcement root out illicit digital currency transactions. The company’s competitors include New York-based Chainalysis and London-based start-up Elliptic.
“Digital assets have the potential to reimagine commerce, from everyday acts like paying and collecting to transforming economies, making them more inclusive and efficient,” said Ajay Bhalla, president of cyber intelligence at Mastercard, in a statement. “With the rapid growth of the digital asset ecosystem, there is a need to ensure that it is reliable and secure.”
The financial terms of the deal were not disclosed. Shares of Mastercard rose about 0.6% Thursday morning in New York.
One of the main concerns with bitcoin and other cryptocurrencies is that the people who trade them are anonymous. This has made digital assets the preferred currency for various hackers and other criminals. However, the blockchain is a major book of all digital currency transactions and services like CipherTrace analyze fund movements to determine if they are questionable.
Mastercard said the deal would help its customers protect themselves and comply with regulations as they begin to build their own digital currency offerings. CipherTrace says its platform is used by some of the largest banks and cryptographic exchanges in the world.
The deal is the latest sign of how big companies are showing a growing interest in the crypto market. Mastercard itself said it would open its network to select cryptocurrencies this year, while rival Visa recently revealed more than $ 1 billion in cryptocurrencies that consumers spent with their crypto-linked payment cards.
Bitcoin was trading at around $ 47,000 on Thursday, up nearly 2% in the last 24 hours. The world’s largest digital currency fell sharply on Tuesday after El Salvador adopted it as its legal tender.
Proponents of cryptocurrencies saw the move as a step toward broader adoption of the asset class. However, the launch of bitcoins in El Salvador was not without its problems, as the country temporarily deactivated its official bitcoin portfolio to increase the capacity of its servers.