Mastercard says it has created a solution that helps it tokenize (or wrap) CBDCs on different blockchains.
global payment platform mastercard inc (NYSE:MA) has announced Successful completion of an experiment using wrapped central bank digital currencies (CBDC,
As Coinspeaker informed of In March, the company received help from the Reserve Bank of Australia (RBA) as well as the country’s Digital Finance Cooperative Research Center CBDC in carrying out the trial. It also saw participation from Kuskal and Mintable.
Sharing details of the test, Mastercard says it has designed a solution that helps it tokenize (or wrap) CBDCs on different blockchains. According to MasterCard, this solution offers consumers an alternative way to transact on different blockchains, albeit with relative ease and better security.
Interestingly, the RBA and DFCRC used the test to explore use cases for an Australian CBDC.
Mastercard says solution gives ability to take control over CBDC
MasterCard shares that the solution has measures built in that ensure that only verified parties will be able to hold, use, or redeem the pilot CBDC. That is, such parties must undergo Know Your Customer (KYC) verification process and risk assessment by licensed service providers.
In a live environment, Mastercard also demonstrated how its solution allows a CBDC owner to purchase a non-fungible token (NFT) which is listed on the Ethereum public blockchain. This process locks the required quantity of Pilot CBDC on the RBA’s Pilot CBDC platform. It then reveals the exact value of the pilot CBDC token wrapped on Ethereum. The payment processing giant says:
“With all other transfers of the Wrapped Pilot CBDC blocked, it successfully demonstrated the platform’s ability to exert control over public blockchains as well.”
For what it’s worth, the features highlighted by Mastercard in the CBDC trial will go a long way in paving the way for its adoption. What’s more, the solution potentially holds big benefits that could play a role in faster adoption. As Mintable’s CEO and founder, Zack Burks, says, this could now be the beginning of a new era for commerce. He said:
“Together with MasterCard, we have identified a use case that allows digital currencies and NFTs to be easily linked, potentially preventing fraud and theft, eliminating loss of documentation and records.” and new possibilities for commerce could be uncovered.”
The RBA has previously claimed that the Australian dollar would bring massive benefits to the CBDC finance sector. The central bank particularly commented on its ability to enable complex payment arrangements that fiat money cannot. However, the RBA also emphasizes that “more research” is needed before making a final decision on CBDCs.
Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his writing style. He strongly believes in the potential of digital assets and takes every opportunity to reiterate it. He is also a reader, a researcher, an astute speaker and a budding entrepreneur. However, away from crypto, Mayowa’s imaginary distractions include discussing football or world politics.
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