Mastercard introduces fraud and sanctions screening to stablecoin payments

Mastercard has introduced a stablecoin transaction security service that allows financial institutions to screen payments for fraud, scams and sanctions risks before funds move across blockchain networks.

According to an October 19 announcement, the company unveiled Stablecoin Security at Money20/20 USA, naming Borderless.xyz and Keyrails as its first partners, with an initial launch in North America and worldwide commercial availability expected in 2027.

The service combines conventional payment data with blockchain analytics to help banks and payment providers assess risks at different stages of a stablecoin transaction.

Mastercard said the system can generate a risk score before a payment is completed, allowing financial institutions to decide whether to process a transaction or send it for further review.

The company plans to expand the service through BVNK, the stablecoin infrastructure provider it acquired in August, as it adds security tools to its existing digital asset payment services.

Mastercard Stablecoin Security screens payments before settlement

Stablecoin Security operates through a platform-agnostic application programming interface that financial institutions can connect to their existing systems.

The API examines payment details, the origin of funds, potential exposure to restricted parties and indicators associated with scams or other financial crimes.

Banks can use the information within their existing fraud monitoring, compliance and case management systems without having to build separate processes for stablecoin transactions.

Mastercard said the service covers both traditional currency payments and blockchain transfers, allowing institutions to assess risks before money enters the blockchain network and during subsequent movements.

Ann Johnson, Mastercard’s executive vice president of Security Solutions, said financial institutions needed more information to assess transactions as stablecoins became part of international payment systems.

“Stablecoins are creating new possibilities for value exchange, but financial institutions need the right intelligence and controls to participate with confidence,” Johnson said.

According to the company, the service is designed for payment arrangements involving several financial institutions, currency conversions and blockchain transfers.

A bank handling an international supplier payment, for example, could use the API to assess the transaction before sending stablecoins to another country.

If the screening identifies potential fraud or sanctions exposure, the bank could review the transaction before allowing the payment to proceed.

The company has not disclosed the pricing structure, supported blockchain networks or a specific worldwide launch date beyond its 2027 target.

Complex stablecoin transactions create monitoring challenges

Mastercard cited research examining 593 million stablecoin transfer events across 141 million Ethereum transactions in 2025 to explain the monitoring problems faced by financial institutions.

The study found that nearly 60% of the stablecoin transfers involved complex, multistep transactions instead of simple transfers between two parties.

Such payment arrangements can involve several intermediary wallets or transactions, making it difficult to follow the movement of funds through the complete payment process.

Mastercard said combining information from conventional payment systems with blockchain activity would help financial institutions assess risks across transactions involving multiple parties.

The service is intended to examine both the circumstances surrounding a payment and the blockchain addresses or entities involved in moving the funds.

Existing Mastercard security products provide some of the infrastructure for the new offering.

Crypto Secure supports risk assessment for cryptocurrency transactions, while Mastercard Crypto Credential provides identity and compliance information for digital asset transfers.

In August, crypto.news examined Mastercard Crypto Credential after the company launched a pilot with Borderless.xyz, Infinia, Walapay and Koywe.

The pilot tested a compliance model in which verified identity and regulatory information could be recognized by multiple participants in cross-border stablecoin payment flows.

Crypto Credential focuses on identity assurance, while the newly announced Stablecoin Security service evaluates transaction risks using payment and blockchain intelligence.

Borderless.xyz and Keyrails join initial deployment

Borderless.xyz and Keyrails will be the first partners working with Mastercard to bring the security service into stablecoin payment operations.

Both companies participate in Mastercard’s Start Path Blockchain and Digital Assets program, which supports startups developing blockchain and cryptocurrency infrastructure.

Borderless.xyz provides financial institutions with access to licensed stablecoin payment providers across more than 113 countries and 72 currencies.

Its infrastructure manages payment operations and selects providers for transactions across different markets.

Mastercard said the partnership would allow financial institutions using such payment services to assess risks across providers, currencies and jurisdictions.

Alex Garn, chief product officer at Borderless.xyz, said the collaboration would help institutions manage payment risks without adding unnecessary operational complexity.

Keyrails focuses on high-value international trade payments, particularly in emerging markets where businesses use stablecoins for settlement.

The company said the partnership would strengthen risk monitoring for cross-border trade transactions.

Rajpal Khangura, Keyrails’ co-founder and chief compliance officer, said the collaboration would help institutions gain more information about the risks associated with international stablecoin settlement.

Mastercard did not disclose how many financial institutions would initially use the service or identify a commercial launch date for either partner.

BVNK acquisition supports Mastercard’s stablecoin expansion

The planned integration with BVNK follows several investments and product launches focused on stablecoin payments.

Mastercard completed its BVNK acquisition on August 3 in a deal valued at up to $1.8 billion.

BVNK provides infrastructure connecting conventional currencies with blockchain networks for payments, settlement, payouts and treasury operations.

The acquisition gave Mastercard additional technology for handling stablecoin transfers and conversions between digital assets and traditional currencies.

On October 16, Mastercard launched its Global Money Platform with BVNK, allowing banks, fintech companies and businesses to manage fiat accounts, stablecoin payments and currency conversions through a single API.

Nuvei, Marqeta, Ontop, Beem and Almond FinTech were among the companies preparing to integrate the platform.

The service connects with Mastercard Move, with local bank payouts expected to cover more than 40 currencies across over 200 countries and territories in 2027.

Mastercard said BVNK would support the expansion of Stablecoin Security during 2027, although it did not specify which services or markets would receive the integration first.

Kimberly Mescal Julien, BVNK’s global head of partnerships, said the company was looking at how the new security capabilities could strengthen the infrastructure supporting stablecoin transactions.

Mastercard ties blockchain security to AI payment safeguards

Mastercard’s October 19 announcement followed the introduction of new security capabilities for its Agent Pay platform, which supports transactions initiated by artificial intelligence agents.

In a separate interview published the same day, Johnson said Mastercard was using its experience with conventional payment fraud to develop security tools for stablecoins and automated commerce.

She said the company’s network processes approximately 175 billion transactions annually, providing information about fraud patterns across different regions, merchants and financial institutions.

Mastercard uses intelligence from Recorded Future, the cybersecurity company it acquired, alongside payment transaction data to identify potential threats.

Johnson said financial institutions were seeking security services that could support newer payment methods while maintaining the protections associated with traditional payment systems.

The executive identified cross-border payments as the clearest current use case for stablecoins, citing faster and more transparent international transfers.

AI-initiated payments, by comparison, were expected to rely heavily on card transactions because consumers would continue to require fraud monitoring, payment protections and support when software agents made purchases on their behalf.

Mastercard introduced Agent Pay for Machines in June with support from more than 30 companies, including Ripple, Coinbase and the Solana Foundation.

The platform was designed to support automated payments between software agents, including high-volume transactions involving relatively small amounts.

Johnson said Mastercard’s security strategy centered on identifying fraudulent transactions before they were completed, using intelligence from its payment network and cybersecurity operations.

The company said Stablecoin Security would initially launch in North America, while the worldwide commercial rollout remained scheduled for 2027.