Mastercard partners with blockchain leaders to explore CBDCs
Mastercard is partnering with seven blockchain and payment technology providers to explore the potential and challenges of central bank digital currencies (CBDCs).
The specific plans for the collaboration remain under wraps in the payment giants’ Aug. 17 announcement.
Mastercard has highlighted key areas of interest in the CBDC realm, such as security, privacy, interoperability, and innovation.
Raj Dhamodharan, Mastercard’s head of digital assets and blockchain, emphasized the significance of these aspects.
“We believe in payment choice and that interoperability across the different ways of making payments is an essential component of a flourishing economy. As we look ahead toward a digitally driven future, it will be essential that the value held as a CBDC is as easy to use as other forms of money.”
Raj Dhamodharan, Mastercard’s head of digital assets and blockchain
CBDCs, though not cryptocurrencies, are related to them. They could utilize blockchain technology, the same ledger system that underpins cryptocurrencies like Bitcoin. Essentially, a CBDC would be a digital version of a fiat currency like the US dollar endorsed by the government.
The partnership will unite companies already playing significant roles in CBDC development. This includes Ripple, which has launched a dedicated CBDC platform; software firm ConsenSys, known for its involvement in several CBDC initiatives; and tokenized assets solution provider Fluency, engaged in 23 CBDC projects.
Other participants are Giesecke+Devrient, which has collaborated with the central banks of Ghana and Thailand; Idemia, specializing in offline payments; Consult Hyperion, working with major banks on offline payment solutions; and institutional custody platform Fireblocks.
Mastercard’s history of innovation in the digital asset ecosystem, particularly in the CBDC space, is well-established. Earlier in 2021, the company introduced a prepaid card for Bahamians to utilize the country’s first CBDC.
More recently, Mastercard disclosed plans to establish a testbed to study tokenized bank deposits in the UK, with an eye towards including CBDCs and regulated stablecoins.