Payment giant Mastercard has made further inroads into the world of CBDCs by demonstrating interoperability capabilities with multiple blockchains.
Mastercard – one of the largest payment networks in the world – has made a significant development in the world of central bank digital currencies today, demonstrating a new solution that enables CBDCs to be tokenised, or ‘wrapped’, onto different blockchains, such as Ethereum.
The trial was facilitated in partnership with the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC).
The company demonstrated in a live environment how CBDCs can interoperate with different blockchains by allowing the owner of a pilot CBDC to purchase an NFT listed on Ethereum.
The announcement explained, “The process “locked” the required amount of a pilot CBDC on the RBA’s pilot CBDC platform and minted an equivalent amount of wrapped pilot CBDC tokens on Ethereum.”
Both the buyer and seller of the NFT had to be placed on an ‘allow list’ within the platform to facilitate the transaction. “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 said.
The trial leveraged Mastercard’s Multi Token Network, which is part of the network’s wider plan to expand blockchain-based transactions across a range of use cases. The network is currently being piloted with financial institutions around the world.
Richard Wormald, Division President, Australasia at Mastercard, said: “By enabling people to easily move digital currencies on-demand, via Mastercard’s trusted network, more consumers could participate in crypto ecosystems using reputable and reliable forms of money, while enjoying the benefits that these currencies offer such as programmability, transparency, and compliance.”
In August, Mastercard announced a partnership with some huge names in Web3 including Ripple, Consensys, Fireblocks and more, in a bid to explore the benefits and limitations of CBDCs.
The network addressed the concern of privacy and urged central banks to strike the right balance between “privacy and transparency” in order to prevent illicit activities, while still preserving an individual’s right to privacy.
New research shows that 93% of the central banks are already experimenting and conducting research on CBDCs. China has already started to pay some government employees in a CBDC known as e-CNY, which represents the Yuan.
Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.