• Mastercard has successfully completed a CBDC pilot project in partnership with the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC). 
• The project aimed to explore the use of central bank digital currencies (CBDCs) for purchasing non-fungible tokens (NFTs) on the Ethereum blockchain.
• This initiative leveraged the Multi Token Network, introduced in June 2023, to enable secure blockchain interactions and interoperability across various payment tokens.

Global payments technology company Mastercard has completed a pilot project with the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre to test the use of central bank digital currencies (CBDCs). The project explored the use of CBDCs to purchase non-fungible tokens (NFTs) on the Ethereum blockchain.

Read the BitPinas CBDC Series:

CBDC Pilot Test

In a statement, Mastercard revealed that the project successfully tested the use of CBDCs to purchase NFTs. It demonstrated how authorized parties can hold, use, and redeem CBDCs, and how a holder can purchase an Ethereum-based NFT by locking the pilot CBDC and minting an equivalent amount of Ethereum-based wrapped coins.

“As the digital economy continues to mature, Mastercard has seen demand from consumers to participate in commerce across multiple blockchains, including public blockchains.”

Richard Wormald, Australia Division President, Mastercard 

Wormald remarked that the technology not only has the potential to increase consumer choice, but it also opens up new opportunities for collaboration between public and private networks to drive real impact in the digital currency space.

Moreover, the RBA, in partnership with the DFCRC, conducted the pilot project to investigate potential applications of a CBDC in the Australian context. This initiative entailed the issuance of a restricted ‘pilot’ CBDC by the RBA, representing a legitimate claim on the central bank. 

This pilot CBDC was employed by specific industry stakeholders to showcase how a CBDC could facilitate innovative payment and settlement solutions for Australian households and businesses. For additional insights into Mastercard’s role in this project, please refer to the relevant use case details.

Mastercard  Multi-Token Network

Mastercard, in collaboration with Cuscal and Mintable, concluded the CBDC pilot ensuring KYC-verified access. The project utilized the Multi Token Network, introduced in June 2023, with its Crypto Credential for secure blockchain interactions and broad payment token support. 

The firm stated that the network is currently in beta and aligns with Mastercard’s broader strategy for blockchain adoption in payment applications, being tested with select financial institutions globally.

“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.”

Richard Wormald, Australia Division President, Mastercard 

In a statement, Zack Burks, the CEO and Founder of Mintable and a participant in Mastercard’s Start Path development program, highlighted the evident potential of NFTs in the progressive CBDC pilot. He expressed enthusiasm for the collaboration with Mastercard, emphasizing the discovery of a use case that could seamlessly connect digital currencies with NFTs, potentially addressing issues related to fraud, theft, data loss, and opening up new avenues for commerce. 

“We were pleased to collaborate with Mastercard to test new approaches to managing settlement and liquidity risk through the CBDC pilot. It’s exciting to be able to further partner with Mastercard to support the future of banking and payments in Australia,”

Nathan Churchward, Domain Lead, Payments, Cusca

Prior Mastercard Web3 News 

In March, Mastercard, as well as another payments giant Visa, halted their collaboration with cryptocurrency companies due to the challenging bear market conditions and recent crypto market declines. They intend to postpone the release of certain crypto-related products and services until market conditions and regulatory circumstances become more favorable. 

In February, Mastercard collaborated with Immersve to enable cryptocurrency payments in the Web3 environment using USDC settlements. This partnership will allow users to make crypto payments across digital, physical, and metaverse platforms. The collaboration leverages USD Coin, which is converted to fiat for transactions on Mastercard’s network.

In January, the firm initiated a web3 incubator program to assist up-and-coming artists in leveraging web3 tools and blockchain technology to connect with fans and advance their careers. This initiative is a collaborative effort with Polygon, a scaling blockchain operating on the Ethereum platform and boasting partnerships with major brands like Starbucks and Disney. 

In 2022, Mastercard Philippines expressed its willingness to incorporate cryptocurrency transactions into its platform, pending approval from local regulators. They recognize that cryptocurrencies and digital assets are not merely a passing trend.

CBDC in PH

Recently, the Bangko Sentral ng Pilipinas (BSP) has selected Hyperledger Fabric as the Distributed Ledger Technology (DLT) for the Philippines’ wholesale CBDC pilot. Hyperledger Fabric is an open-source blockchain designed for enterprise applications, known for its modular “plug-and-play” components and consensus mechanism that balances scalability with privacy.

This article is published on BitPinas: Mastercard Completes CBDC Pilot with Reserve Bank of Australia

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