Mastercard has joined the Central Bank Digital Currency (CBDC) pilot project in Australia, where they showcased the capabilities of CBDCs by purchasing a non-fungible token (NFT) listed on the Ethereum blockchain.
The innovative process effectively “wrapped” the CBDC on the Reserve Bank of Australia’s (RBA) pilot CBDC platform and created wrapped pilot CBDC tokens on the Ethereum blockchain.
Mastercard announced this significant milestone in a press statement on 12th October, emphasizing the successful development of a new solution. This solution enables CBDCs to be tokenized or “wrapped” on various blockchains, opening up new opportunities for consumers to participate in commerce across multiple blockchains while enhancing security and user-friendliness.
The collaboration that led to this achievement involved Mastercard, Cuscal, and Mintable as part of a research project with RBA and DFCRC. They aimed to explore potential use cases for a CBDC in Australia.
They emphasized stringent controls to ensure pilot CBDCs can only be held, used, and redeemed by authorized parties who have undergone Know Your Customer (KYC) verification and risk assessment by licensed service providers.
Richard Wormald, Division President, Australasia at Mastercard, explained the rationale behind this development:
This technology not only has the potential to drive more consumer choice, but it also unlocks new opportunities for collaboration between the public and private networks to drive genuine impact in the digital currency space.
Mastercard’s Broader Blockchain Strategy
The live demonstration showcased how the solution allowed the holder of a pilot CBDC to purchase an NFT on the Ethereum public blockchain with robust controls in place. This success also highlights the Multi Token Network introduced by Mastercard, designed to make payments and commerce applications more efficient using blockchain technology.
This initiative aligns with Mastercard’s broader strategy to expand blockchain technology usage in various payment scenarios, with the network currently in beta testing and being piloted by select financial institutions worldwide.
However, this achievement by Mastercard, in collaboration with RBA, Cuscal, and Mintable, represents a significant step in the evolution of CBDCs and blockchain technology.
It showcases the potential for greater blockchain interoperability and offers consumers new opportunities to securely and transparently engage with digital currencies.
Related Reading | SBF Alleges Binance’s Secret Plot In FTX Downfall