Stablecoin fraud is becoming the primary method for bad actors and Mastercard’s latest launch aims to address this with a more complete view of the process.
Mastercard will rollout a new security and risk layer designed to mitigate fraud within the stablecoin payment lifecycle.
Announced at Money 20/20 USA in Las Vegas yesterday (19 October), Mastercard has developed the risk layer alongside initial partners Borderless.xyz and Keyrails to be built within its existing capabilities.
Mastercard Stablecoin Security intends to help financial institutions using stablecoin payment rails and services to identify fraud, scams, sanctions and other risk indicators before the funds move on-chain.
The service runs on a platform-agnostic API, analysing signals such as transaction context, where the funds came from, scam indicators and exposure to restricted parties.
Stablecoin Security uses intelligence from fiat and stablecoin payment life cycles which can be integrated into financial institutions’ existing fraud and compliance infrastructure. The service uses risk scores before a payment is complete.
The service can be performed at the point-of-sale, with the merchant sending the stablecoin payment to its bank and using Stablecoin Security to analyse the payment through blockchain intelligence, assessing whether the transaction is vulnerable to fraud or a scam. The funds can then be converted, either fiat-to-stablecoin, or vice-versa.
Kimberly Mescal Julien, Global Head of Partnerships at BVNK – a Mastercard-owned company, said: “As stablecoins become more embedded in global payments, security needs to evolve alongside the technology.
“We look forward to exploring how innovations such as this can help strengthen the infrastructure underpinning stablecoin transactions and support the ecosystem’s continued growth.
Mastercard Stablecoin Security is expected to launch worldwide in 2027, with its initial rollout phase happening in North America first.
The solution is launching first in North America, with commercial availability expected worldwide in 2027.
The stablecoin security questions
According to Chainalysis’ 2026 Crypto Crime report in January 2026, stablecoins made up 84% of all illicit cryptocurrency transaction volume last year.
US dollar-denominated stablecoins are becoming the primary method for illicit finance criminal organisations to use for fraud over more volatile digital assets, such as Bitcoin which has experienced declines in valuation over the last year.
One of the key findings from Chainalysis to the rise of stablecoin payment fraud was the use of on-chain bots from bad actors.
This see’s scammers generate anonymous addresses to send zero-value stablecoin transfers to the victim’s address which is embedded in their stablecoin wallet. When the victim makes a transfer from the wallet, the attacker copies the destination address from the recent transaction history, redirecting the transfer to the attacker’s wallet.
Mastercard cited a study from the Bank of International Settlements (BIS) which revealed across 141 million transactions processed on the Ethereum blockchain, 60% were complex and this can make it harder for financial institutions to assess risk across the payment lifecycle.
The global card network is seeking to address these complexities by using payment intelligence alongside blockchain analytics, enabling a more complete view of the risks potentially at play.
Alex Garn, Chief Product Officer at Borderless.xyz, said: “Stablecoin payments should be simple to launch and manage, even when the infrastructure behind them is complex.
“Working with Mastercard will help give financial institutions the context they need to manage risk across providers, markets and currencies without adding another layer of operational complexity.”
