Mastercard Wraps Central Bank Digital Currencies (CBDCs) on Multiple Blockchains
Mastercard has successfully completed a trial in which it wrapped central bank digital currencies (CBDCs) on different blockchains, similar to the concept of wrapped Bitcoin (wBTC) and wrapped Ether (wETH). The trial was conducted in collaboration with the Reserve Bank of Australia (RBA), the country’s Digital Finance Cooperative Research Centre CBDC, Cuscal, and Mintable.
During the trial, Mastercard’s solution enabled a CBDC owner to purchase a nonfungible token (NFT) listed on Ethereum. The process involved locking the required amount of a pilot CBDC on the RBA’s platform and minting an equivalent amount of wrapped pilot CBDC tokens on Ethereum.
“A pre-requisite of the test transaction was that the Ethereum wallets of both the buyer and seller, as well as the NFT marketplace smart contract, were ‘allow-listed’ within the platform. With all other transfers of the wrapped pilot CBDC blocked, it successfully demonstrated the platform’s ability to implement controls – even on public blockchains.”
Mastercard’s Multi Token Network Integration
This trial utilized Mastercard’s Multi Token Network, which was introduced in June 2023. The network integrates payment technology with blockchains and enables the easy linkage between digital currencies and NFTs. This integration has the potential to combat fraud and theft, eliminate document and record losses, and open up new possibilities for commerce.
Zack Burcks, CEO and founder of Mintable, commented on this collaboration stating, “Together with Mastercard, we have identified a use case whereby digital currencies and NFTs can easily be linked, potentially stamping out fraud and theft, ending the loss of documentation and records, and unleashing new possibilities for commerce.”
The Potential of an Australian Dollar CBDC
The Reserve Bank of Australia (RBA) has previously expressed that a potential Australian dollar CBDC could enable complex payment arrangements and foster innovation in the finance sector that cannot be achieved with traditional fiat money. However, the central bank also emphasized the need for further research to evaluate the benefits of implementing a CBDC.
Hot Take: Mastercard Expands CBDC Use Cases with Wrapping Technology
Mastercard’s successful trial demonstrates the potential for expanding the use cases of central bank digital currencies (CBDCs) through the application of wrapping technology. By enabling CBDCs to be utilized on different blockchains, similar to wrapped Bitcoin and wrapped Ether, Mastercard opens up new possibilities for commerce and seamless integration with nonfungible tokens (NFTs). This development paves the way for enhanced security, fraud prevention, and record-keeping in digital transactions. With this innovation, Mastercard continues to drive advancements in digital payments and blockchain integration, positioning itself as a key player in the future of finance.
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