The MasterCard logo on a smartphone in Saint Thomas, Virgin Islands.
Gabby Jones | Bloomberg | Getty Images
Mastercard has agreed to acquire blockchain analytics startup CipherTrace, as the latest sign of how big companies are warming to cryptocurrencies.
The payment giant announced Thursday that it had reached an agreement to buy CipherTrace for an undisclosed amount. CipherTrace, based in Menlo Park, California, develops tools to help businesses and law enforcement agencies track down illegal digital currency transactions. The company’s competitors include New York-based Chainalysis and London-based start-up Elliptic.
“Digital assets have the potential to rethink commerce, from everyday actions like paying and transforming economies to make them more inclusive and efficient,” said Ajay Bhalla, President of Cyber and Intelligence at Mastercard. in a statement. “With the rapid growth of the digital asset ecosystem, there is a need to ensure that it is trustworthy and secure.”
Financial terms of the transaction were not disclosed. Mastercard’s shares rose about 0.6% on Thursday morning in New York.
A major concern with Bitcoin and other cryptocurrencies is that the people who make them are anonymous. This has made digital assets the currency of choice for a number of hackers and other criminals. However, the blockchain is a public ledger of all digital currency transactions, and services like CipherTrace’s analyze money movements to determine if they are in doubt.
Mastercard said the deal would help its customers protect themselves and comply with regulations as they start building their own digital currency offerings. According to CipherTrace, its platform is used by some of the world’s largest banks and crypto exchanges.
The deal is the latest sign that big companies are showing increasing interest in the crypto market. Mastercard itself said it will open its network to select cryptocurrencies this year, while rival Visa recently announced that consumers have spent more than $ 1 billion worth of crypto on its crypto-linked payment cards.
Bitcoin was trading at around $ 47,000 on Thursday, up nearly 2% over the past 24 hours. The world’s largest digital coin slumped Tuesday after El Salvador introduced it as legal tender.
Proponents of cryptocurrencies saw the move as a step towards wider adoption of the asset class. The Bitcoin rollout in El Salvador was not without problems, however, as the country temporarily disabled its official Bitcoin wallet to increase the capacity of its servers.