Mastercard Demonstrates Solution for Interoperable CBDCs
Mastercard has unveiled a new solution that allows central bank digital currencies (CBDCs) to be interoperable with different blockchains. Developed in collaboration with Cuscal and Mintable, the solution was tested as part of a pilot project conducted by the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC). The project explored various use cases for a CBDC in Australia, including retail payments, wholesale settlement, and cross-border transactions.
With Mastercard’s solution, CBDCs can be tokenized or “wrapped” onto different blockchains, such as Ethereum, while maintaining control and oversight by the central bank. This enables consumers to use CBDCs for activities like purchasing non-fungible tokens (NFTs) or accessing decentralized applications (DApps).
The solution includes controls that ensure only authorized parties verified by licensed service providers can hold, use, and redeem the CBDC. This provides trust and security for both the central bank and CBDC users.
Live Demonstration of Interoperability
Mastercard demonstrated the solution in action by allowing a pilot CBDC holder to buy an NFT on the Ethereum public blockchain. The process involved locking the required amount of pilot CBDC on the RBA’s platform and minting an equivalent amount of wrapped pilot CBDC tokens on Ethereum. The successful transaction showcased the platform’s ability to implement controls, even on public blockchains.
Potential for Consumer Choice and Collaboration
Richard Wormald, Division President, Australasia at Mastercard, highlighted that as the digital economy evolves, there is growing consumer demand to participate in commerce across multiple blockchains. He stated that this technology opens up new opportunities for collaboration between public and private networks in the digital currency space.
Mastercard’s Multi Token Network
The pilot project utilized two key components of Mastercard’s Multi Token Network, introduced in June 2023. This network includes Mastercard Crypto Credential, which offers common verification standards and infrastructure for trusted interactions on blockchain networks. The solution also prioritizes interoperability to provide scalable capabilities across supported payment tokens and networks.
Hot Take: Advancing CBDC Adoption with Interoperability
Mastercard’s demonstration of a solution that enables interoperability between CBDCs and different blockchains marks a significant step forward in advancing the adoption of central bank digital currencies. By allowing CBDCs to be tokenized on various blockchains, Mastercard empowers consumers to engage in diverse forms of commerce, such as buying NFTs or accessing DApps. The inclusion of controls ensures that only authorized parties can handle the CBDC, enhancing trust and security for both the central bank and CBDC users. This development not only meets consumer demand for participation in multiple blockchains but also opens up opportunities for collaboration between public and private networks in the digital currency realm.
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