Mastercard, in collaboration with the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC), has successfully showcased a groundbreaking solution that facilitates the tokenisation (or “wrapping”) of Central Bank Digital Currencies (CBDCs) on various blockchains.
The CBDC pilot project, conducted with RBA and DFCRC, delved into potential applications of CBDC in Australia.
Through this initiative, Mastercard has showcased its ability to enable CBDCs to seamlessly interact with different blockchains while maintaining its security standards.
In partnership with Cuscal and Mintable, as part of an RBA and DFCRC research project, Mastercard’s solution includes the use robust controls.
These controls ensure that the pilot CBDC can be held, utilised, and redeemed exclusively by authorised entities, which have undergone Know Your Customer (KYC) verification and risk assessment by licensed service providers.
Mastercard demonstrated the solution in a live environment, showcasing how a holder of a pilot CBDC could purchase a Non-Fungible Token (NFT) on the Ethereum public blockchain.
The process involved locking the required amount of the pilot CBDC on the RBA’s platform and minting an equivalent value of wrapped pilot CBDC tokens on Ethereum.
A key precondition for this transaction was that the Ethereum wallets of the buyer and seller, along with the NFT marketplace’s smart contract, were ‘allow-listed’ within the platform.
This demonstrated the platform’s capability to implement controls, even within public blockchains.
This pilot project leveraged two core components of the Multi Token Network, first introduced by Mastercard in June 2023.
This network purportedly offers foundational capabilities designed to enhance the efficiency of payments and commerce applications using blockchain technology.
It includes the Mastercard Crypto Credential, which establishes common verification standards and infrastructure for secure interactions within blockchain networks, alongside interoperability to provide scalable capabilities across all supported payment tokens and networks.
Mastercard’s Multi-Token Network, currently in beta, plays a pivotal role in their broader strategy to expand the use of blockchain technology in various payment scenarios.
It will empower regulated entities to harness the potential of digital assets and is presently undergoing pilot testing with select financial institutions globally.