US-12626246-B2 - Method and system for conversion of digital assets to fiat currency

US12626246B2US 12626246 B2US12626246 B2US 12626246B2US-12626246-B2

Abstract

A method for conversion of digital assets to fiat currency using a secondary blockchain and mirrored accounting includes: receiving transaction data corresponding to a first blockchain transaction processed using a first blockchain, the transaction data including a payer identifier, recipient identifier, and blockchain currency amount; validating an entity as an authorized entity associated with the payer identifier; determining a fiat currency amount based on the blockchain currency amount; generating a second blockchain transaction, the second blockchain transaction including an unspent transaction output, destination address associated with the authorized entity, and the blockchain currency amount and/or the fiat currency amount; confirming addition of the second blockchain transaction to a second blockchain; and initiating a transfer for the fiat currency amount from a first transaction account to a second transaction account, the second transaction account being associated with the authorized entity.

Inventors

Thomas TREITLINGER
Jose Pereira
Eduardo Andrade
Sébastien LE CALLONNEC
Lauren Grendon

Assignees

MASTERCARD INTERNATIONAL INCORPORATED

Dates

Publication Date: 20260512
Application Date: 20240528

Claims (20)

1 . A method for conversion of digital assets to fiat currency using a secondary blockchain and mirrored accounting, comprising: storing, by a processing server in a database, one or more blockchain wallet addresses designated for conversion of a blockchain currency to a fiat currency; monitoring, by the processing server, blockchain transactions on a first blockchain; detecting, by the processing server, on the first blockchain, a first blockchain transaction including one of the one or more blockchain wallet addresses designated for conversion as a destination address, a first blockchain address of an entity as a sending address, and a blockchain currency amount; verifying, by a validation module of the processing server, the entity as an authorized entity; in response to verifying the sending address as an authorized entity, determining, by the processing server, a fiat currency amount based on at least the blockchain currency amount; determining, by the processing server, a second blockchain address of the entity on a second blockchain; generating, by a generation module of the processing server, a second blockchain transaction, the second blockchain transaction including at least an unspent transaction output, the second blockchain address, and one of the blockchain currency amount and the fiat currency amount; transmitting, by a transmitting device of the processing server, the second blockchain transaction to the second blockchain; determining, by the processing server, a first transaction account of the entity for receiving the fiat currency amount; and initiating, by the processing server, a transfer for the fiat currency amount to the first transaction account from a second transaction account.
2 . The method of claim 1 , further comprising: storing, by the processing server in an account database, the account database including an account profile associated with the entity, the account profile including entity data comprising at least the first blockchain wallet address, the second blockchain wallet address, the first transaction account, and an entity identifier.
3 . The method of claim 2 , further comprising: executing, by a querying module of the processing server, a query on the account database to identify the account profile based on the first blockchain wallet address; identifying, by the querying module of the processing server, the account profile; requesting, by the processing server, entity data from the entity; and receiving, by a receiving device of the processing server, the entity data from the entity; wherein verifying the entity as an authorized entity includes comparing, by the processing server, the entity data received from the entity to the entity data stored in the identified account profile.
4 . The method of claim 1 , further comprising: transmitting, by the transmitting device of the processing server to a third-party computing device, a request for an exchange rate for the blockchain currency to the fiat currency; and receiving, by a receiving device of the processing server from the third-party computing device, the exchange rate for the blockchain currency to the fiat currency; wherein determining the fiat currency amount based on at least the blockchain currency amount is further based on the exchange rate.
5 . The method of claim 1 , wherein the determining the first transaction account includes: transmitting, by the transmitting device of the processing server, to a computing device associated with the entity, a request for the first transaction account; and receiving, by a receiving device of the processing server from the computing device associated with the entity, the first transaction account.
6 . The method of claim 1 , further comprising: prior to initiating the transfer for the fiat currency amount to the first transaction account, confirming, by the validation module processing server, addition of the second blockchain transaction to the second blockchain.
7 . The method of claim 1 , further comprising: storing, by the processing server a private key of a cryptographic key pair; and generating, by the generation module of the processing server, a digital signature using the private key, wherein the digital signature is included in the second blockchain transaction.
8 . The method of claim 1 , wherein the transmitting the second blockchain transaction to the second blockchain includes: generating, by the generation module of the processing server, a new block for the second blockchain, the new block including at least a block header and one or more new blockchain transactions, the one or more new blockchain transactions including at least the second blockchain transaction; and transmitting, by the transmitting device of the processing server, the generated new block to one or more nodes in a blockchain network.
9 . The method of claim 1 , further comprising: receiving, by a receiving device of the processing server, prior to the detecting the first blockchain transaction, a request for the one of the one or more blockchain wallet addresses designated for conversion from a computing device associated with the entity.
10 . The method of claim 1 , wherein the second blockchain address is a mirror account of the first blockchain address.
11 . A system for conversion of digital assets to fiat currency using a secondary blockchain and mirrored accounting, comprising: a computing device including a non-transitory computer-readable storage medium having program instructions embodied therewith, the program instructions executable by a processor to cause the processor to perform the steps of: storing, by a processor in a database, one or more blockchain wallet addresses designated for conversion of a blockchain currency to a fiat currency; monitoring, by the processor, blockchain transactions on a first blockchain; detecting, by the processor on the first blockchain, a first blockchain transaction including one of the one or more blockchain wallet addresses designated for conversion as a destination address, a first blockchain address of an entity as a sending address, and a blockchain currency amount; verifying, by a validation module of the processor, the entity as an authorized entity; in response to verifying the sending address as an authorized entity, determining, by the processor, a fiat currency amount based on at least the blockchain currency amount; determining, by the processor, a second blockchain address of the entity on a second blockchain; generating, by a generating module of the processor, a second blockchain transaction, the second blockchain transaction including at least an unspent transaction output, the second blockchain address, and one of the blockchain currency amount and the fiat currency amount; transmitting, by a transmitting device of the processor, the second blockchain transaction to the second blockchain; determining, by the processor, a first transaction account of the entity for receiving the fiat currency amount; and initiating, by the processor, a transfer for the fiat currency amount to the first transaction account from a second transaction account.
12 . The system of claim 11 , further comprising: storing, by the processor in an account database, the account database including an account profile associated with the entity, the account profile including entity data comprising at least the first blockchain wallet address, the second blockchain wallet address, the first transaction account, and an entity identifier.
13 . The system of claim 12 , further comprising: executing, by a querying module of the processor, a query on the account database to identify the account profile based on the first blockchain wallet address; identifying, by the querying module of the processor, the account profile; requesting, by the processor, entity data from the entity; and receiving, by a receiving device of the processor, the entity data from the entity; wherein verifying the entity as an authorized entity includes comparing, by the processor, the entity data received from the entity to the entity data stored in the identified account profile.
14 . The system of claim 11 , further comprising: transmitting, by the transmitting device of the processor, to a third-party computing device, a request for an exchange rate for the blockchain currency to the fiat currency; and receiving, by a receiving device of the processor, from the third-party computing device, the exchange rate for the blockchain currency to the fiat currency; wherein determining the fiat currency amount based on at least the blockchain currency amount is further based on the exchange rate.
15 . The system of claim 11 , wherein the determining the first transaction account includes: transmitting, by the transmitting device if the processor, to a computing device associated with the entity, a request for the first transaction account; and receiving, by a receiving device of the processor, from the computing device associated with the entity, the first transaction account.
16 . The system of claim 11 , further comprising: prior to initiating the transfer for the fiat currency amount to the first transaction account, confirming, by the validation module of the processor, addition of the second blockchain transaction to the second blockchain.
17 . The system of claim 11 , further comprising: storing, by the processor, a private key of a cryptographic key pair; and generating, by the generation module of the processor, a digital signature using the private key, wherein the digital signature is included in the second blockchain transaction.
18 . The system of claim 11 , wherein the transmitting the second blockchain transaction to the second blockchain includes: generating, by the generation module of the processor, a new block for the second blockchain, the new block including at least a block header and one or more new blockchain transactions, the one or more new blockchain transactions including at least the second blockchain transaction; and transmitting, by the transmitting device of the processor, the generated new block to one or more nodes in a blockchain network.
19 . The system of claim 11 , further comprising: receiving, by a receiving device of the processor, prior to the detecting the first blockchain transaction, a request for the one of the one or more blockchain wallet addresses designated for conversion from a computing device associated with the entity.
20 . The system of claim 11 , wherein the second blockchain address is a mirror account of the first blockchain address.

Description

FIELD The present disclosure relates to the conversion of digital assets to fiat currency, specifically the use of a secondary blockchain and mirrored accounting to enable reliable and auditable conversion of a digital asset to a fiat currency. BACKGROUND Blockchain was initially created as a storage mechanism for use in conducting payment transactions with a cryptographic currency. Using a blockchain provides a number of benefits, such as decentralization, distributed computing, transparency regarding transactions, and yet also providing anonymity as to the individuals or entities involved in a transaction. One of the more popular aspects of a blockchain is that it is an immutable record: every transaction ever that is part of the chain is stored therein and cannot be changed due to the computational requirements and bandwidth limitations, particularly as a chain gets longer and a blockchain network adds more nodes. Transactions conducted using a blockchain are made via an exchange of a digital asset associated with that blockchain, such as Bitcoin, Ethereum, etc. Many merchants may be willing to cater to consumers by offering to accept payment via such a digital asset. However, with current methods it is significantly more difficult for a merchant to exchange their digital assets for a fiat currency than it is for exchanging different fiat currencies. Most often, conversion of digital assets is performed using an exchange. A merchant or other interested party will transfer their digital assets to a wallet as directed by the exchange using a new blockchain transaction. The exchange will then pay a corresponding amount in fiat currency to an account provided by the merchant or other interested party, minus a fee collected by the exchange. Unfortunately, due to the technologies involved such processes can be significantly time consuming, particularly due to the constraints of many public blockchains where the transfer of digital assets often takes place. Additionally, exchanges are not regulated institutions and do not have to provide any transparency or accountability, which can result in merchants being taken advantage of or being apprehensive to accept digital asset payments due to the difficulties and dangers in converting their assets to fiat currency. Thus, there is a need for a more efficient, secure, and trustworthy conversion of digital assets to fiat currency. SUMMARY The present disclosure provides a description of systems and methods for conversion of digital assets to fiat currency using a secondary blockchain and mirrored accounting. A computing device monitors transactions that are performed using a blockchain, which may be a public blockchain, for transfers of digital assets. When a merchant or other registered entity makes a transaction using a known account used for conversion, the computing device may detect such a transaction and initiate a conversion process. The conversion process may include validating the identity of the recipient of the digital assets, determination of the equivalent fiat currency to be paid, and the conducting of a mirrored transaction on a secondary blockchain using mirrored accounts. The secondary transaction may serve as an immutable record kept by the computing device for the digital asset conversion, to provide for auditability of asset conversions. Once the secondary transaction is confirmed, the computing device may initiate payment of fiat currency for the determined amount to the recipient, resulting in a successful conversion for the recipient without the need for an exchange and in a manner that is more trustworthy and efficient than in traditional systems. A method for conversion of digital assets to fiat currency using a secondary blockchain and mirrored accounting includes: receiving, by a receiver of a computing device, transaction data corresponding to a first blockchain transaction processed using a first blockchain, the transaction data including at least a payer identifier, a recipient identifier, and a blockchain currency amount; validating, by a processor of the computing device, an entity as an authorized entity associated with the payer identifier; determining, by the processor of the computing device, a fiat currency amount based on at least the blockchain currency amount; generating, by the processor of the computing device, a second blockchain transaction, the second blockchain transaction including at least an unspent transaction output, a destination address associated with the authorized entity, and one of the blockchain currency amount and the fiat currency amount; confirming, by the processor of the computing device, addition of the second blockchain transaction to a second blockchain; and initiating, by a transmitter of the computing device, a transfer for the fiat currency amount from a first transaction account to a second transaction account, the second transaction account being associated with the authorized entity. A system for c