Mastercard Is Proving How CBDCs Can Work in Australia

BY Andrew Rossow •

October 13, 2023

Mastercard revealed its latest strides in the realm of Central Bank Digital Currencies (CBDC) on Oct. 12, in collaboration with the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre.

The highlight of this pilot was the integration of CBDCs into a live transaction involving the purchase of an NFT on the Ethereum blockchain using a ‘wrapped’ CBDC.

The joint venture, formulated with input from financial giant Cuscal and the blockchain-based platform Mintable, seeks to pave the way for CBDCs to function harmoniously across a myriad of blockchain networks.

“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,” said Richard Warmold, the company’s Division President of Australasia in the announcement.

The CBDC project is part of Mastercard’s Multi-Token Network (MTN) initiative, which launched in June 2023 to help act as a “testbed for developing live pilot applications and use cases with financial institutions, fintech, and central banks,” according to a previous report.

The CBDCs involved in this pilot are subject to rigorous oversight. Not just anyone can hold or use these digital currencies. Only the Ethereum wallets of both the buyer and seller were allow-listed, assuming the authorized parties have cleared KYC verifications and have been risk-assessed by licensed service providers.

“As demonstrated in this project, the solutions that play a key role in Multi Token Network have the potential to enable new levels of interoperability between blockchains, in a safe and secure manner. By enabling people to easily move digital currencies on-demand, via Mastercard’s trusted network, more consumers could participate in crypto ecosystems using reputable and reliable forms of money, while enjoying the benefits that these currencies offer such as programmability, transparency, and compliance,” added Wormald.

Editor’s note: This article was written by an nft now staff member in collaboration with OpenAI’s GPT-4.