Mastercard says it has devised a solution that helps it tokenize (or wrap) CBDCs onto different blockchains.
As Coinspeaker reported in March, the company had the help of the Reserve Bank of Australia (RBA) as well as the country’s Digital Finance Cooperative Research Centre CBDC in carrying out the trial. It also saw participation from Cuscal and Mintable.
Sharing details of the trial, Mastercard says it has devised a solution that helps it tokenize (or wrap) CBDCs onto different blockchains. According to Mastercard, this solution offers an alternative way for consumers to transact across different blockchains, albeit with relative ease and improved security.
Interestingly, the RBA and DFCRC did use the trial to explore use cases for an Australian CBDC.
Mastercard Says Solution Allows Ability to Exercise Control Over CBDC
Mastercard shares that the solution has put measures in place that ensure that only verified parties will be able to hold, use, or redeem the pilot CBDC. That is, such parties must have gone through the Know Your Customer (KYC) verification process and risk assessed by licensed service providers.
In a live environment, Mastercard also displayed how its solution allows a CBDC owner to purchase a non-fungible token (NFT) that is listed on the Ethereum public blockchain. The process simply locks the required amount of pilot CBDC on the RBA’s pilot CBDC platform. It then mints the exact worth of wrapped pilot CBDC tokens on Ethereum. The payment processing giant says:
“With all other transfers of the wrapped pilot CBDC blocked, it successfully demonstrated the platform’s ability to implement controls – even on public blockchains.”
For what it’s worth, the features highlighted by Mastercard in the CBDC trial will go a long way in setting the tone for its adoption. More so, the solution potentially holds huge benefits that could further play a role in the fast adoption. As CEO and founder of Mintable, Zack Burcks says, it may just be the dawn of a new era for commerce now. He said:
“Together with Mastercard, we have identified a use case whereby digital currencies and NFTs can easily be linked, potentially stamping out fraud and theft, ending the loss of documentation and records, and unleashing new possibilities for commerce.”
The RBA has previously asserted that an Australian dollar CBDC would bring massive benefits to the finance sector. The central bank particularly remarked on its potential to enable complex payment arrangements in a way that fiat money can’t. However, the RBA also insists that there is a need for “more research” before the CBDC is finally decided upon.