In partnership with the Reserve Bank of Australia (RBA), Mastercard, the multinational financial corporation, is introducing a solution that allows the tokenization of the Australian CBDCs to be used on different public blockchains.
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Mastercard: Bridging public and private blockchains
The global payments titan, Mastercard, with a market cap of over $355 Billion, has unveiled its latest initiative that enables central bank digital currencies (CBDCs) to be tokenized across various blockchains.
Announced in a press release on their official website, the initiative enhances payment alternatives available for the everyday consumer and paints a bold future for digital transactions.
The solution was developed in collaboration with the Reserve Bank of Australia and is the first in this field. Picture the CBDCs as tangible bills. In this process, the chosen amount of pilot CBDC is temporarily “sealed” or locked on the RBA’s specialized platform. In its place, a corresponding tokenized version of the CBDC comes into existence on the Ethereum platform, thus enabling seamless transactions.
A nexus of collaboration and innovation
Richard Wormald, the Division President of Australasia at Mastercard, elaborated on the implications of this endeavor, stating that the project is a conscious effort to amplify consumer choice and foster synergies between the pillars of public and private networks:
“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”.
Behind this game-changing resolution is the combined brainpower of Mastercard, Cuscal, and Mintable. Their concerted efforts, driven by a research directive from the RBA and the Digital Finance Cooperative Research Centre (DFCRC), bore fruit in a live test environment, vividly illustrating the capabilities of this novel solution.
Bringing NFTs to CBDC holders
For the crypto enthusiasts, here’s where it gets even more riveting! Holders of this pioneering central bank digital currency will now have the golden ticket to dive into the world of non-fungible tokens (NFTs), with the ability to purchase them directly from listings on the Ethereum public blockchain. It’s akin to offering art connoisseurs a new, exotic medium to expand their collections.
On the company’s official newsroom portal, Mastercard demonstrated an example of how a user could easily bridge their Australian Dollars to an equivalent tokenized asset through the Mastercard App and purchase any NFT listed on a public network marketplace.
However, with great power comes great responsibility. To ensure this digital transition remains as secure as a vault, stringent controls will be enforced. The pilot CBDC is designed with multiple safeguards. It’s not merely about holding and using it. Only authorized entities, having undergone rigorous Know Your Customer (KYC) verifications and risk evaluations by licensed agencies, will be eligible to harness their capabilities fully.
Diving deeper into the technical backbone, this pilot transaction flexes the prowess of Mastercard’s newly introduced Multi Token Network. Launched just a few months back in June 2023, it is structured around two foundational pillars: the Mastercard Crypto Credential and a focus on interoperability.