Mastercard recently participated in a pilot program with the Reserve Bank of Australia (RBA) and Digital Fiat Currency Research Centre (DFCRC). The pilot aimed to enable secure Web3 commerce through interoperable Central Bank Digital Currencies (CBDCs).
Innovative Mastercard Technology
As part of a pilot project in collaboration with the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC), the initiative aimed to explore viable use cases for a Central Bank Digital Currency (CBDC) in Australia.
Mastercard has developed a technology that enables Central Bank Digital Currencies (CBDCs) to be securely tokenized or "wrapped" on different blockchains. This innovation offers consumers a simple and safe way to conduct transactions across multiple blockchains.
In collaboration with Cuscal and Mintable, Mastercard's solution includes strict controls to ensure that the pilot CBDC can only be accessed, utilised, and redeemed by authorised parties who have undergone proper identity verification (KYC) and risk assessment conducted by licensed service providers.
Richard Wormald, Division President, Australasia at Mastercard, expressed his enthusiasm about the technology:
“As the digital economy continues to mature, Mastercard has seen demand from consumers to participate in commerce across multiple blockchains, including public blockchains. 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,”
Live Demo
A live demonstration showed how the solution could enable a holder of a pilot CBDC to purchase a Non-Fungible Token (NFT) listed on the Ethereum public blockchain. The process involved "locking" the required amount of a pilot CBDC on the RBA’s pilot CBDC platform and minting an equal amount of wrapped pilot CBDC tokens on Ethereum.
Before conducting the test transaction, it was necessary for the Ethereum wallets of both the buyer and seller, as well as the NFT marketplace smart contract, to be approved within the platform. This showcases the platform's capability to enforce controls even on public blockchains.
The pilot used the Multi-Token Network, a blockchain technology introduced by Mastercard in June 2023, and specifically designed to enhance the efficiency of payment and commerce applications.
A Powerful Use Case
Zack Burks, CEO and Founder of Mintable, one of the other participants in the pilot, stated:
“The vast potential of NFTs was obvious during this progressive CBDC pilot. 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.”
He added:
“While digital currencies are in their infancy, NFTs are already being used for new media, gamification, digital identities, loyalty programs, ticketing, authentication, certification, and more.”
Source : CryptoDaily / October 14, 2023