Mastercard's New Solution Enables CBDC Tokenisation

Mastercard has successfully demonstrated the capabilities of a new solution that tokenises Central Bank Digital Currencies (CBDCs) onto different blockchains. This new technology offers consumers a secure and easy way to participate in commerce across multiple blockchains.

The solution, developed in partnership with Cuscal and Mintable as part of an RBA and DFCRC research project, includes controls to ensure that the pilot CBDC can be held, used, and redeemed only by authorised parties.

Increasing Consumer Choice and Collaboration Opportunities

According to Richard Wormald, Division President, Australasia at Mastercard, the solution has the power to increase consumer choice as well as open up new opportunities for collaboration between public and private networks in the digital currency space.

In a live demonstration, Mastercard 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 platform successfully demonstrated its ability to implement controls, even on public blockchains.

Mastercard’s Multi-Token Network

The pilot leveraged two pillars of the Multi-Token Network that Mastercard introduced in June 2023. The platform offers a set of common verification standards and infrastructure for trusted interactions using blockchain networks, and is designed to enable more efficient payment and commerce applications.

Mastercard’s Multi-Token Network, which is currently in beta, is part of Mastercard’s wider strategy to expand the use of blockchain technology across various payments use cases.

Boosting Interoperability and Trust

The solutions that play a key role in the Multi-Token Network have the potential to enable new levels of interoperability between blockchains, according to Wormald. This will allow more consumers to participate in crypto ecosystems using reliable forms of money while enjoying the benefits of digital currencies.

Zach Burks, CEO and Founder of Mintable, believes that the project has highlighted the vast potential of NFTs. He suggests that linking digital currencies and NFTs could help eliminate fraud and theft, end the loss of documentation and records, and unlock new possibilities for commerce.

Future of Banking and Payments in Australia

Cuscal’s Domain Lead, Payments, Nathan Churchward, expressed enthusiasm about collaborating with Mastercard to explore new ways of managing settlement and liquidity risk through the CBDC pilot. He believes that such initiatives can significantly shape the future of banking and payments in Australia.

The RBA’s CBDC pilot project involved the issuance of a limited scale ‘pilot’ CBDC that was a real legal claim on the RBA. The CBDC was used by selected industry participants to demonstrate how it could be used to provide innovative payment and settlement services to Australian households and businesses.