On August 17, 2023, Mastercard announced its collaboration with seven prominent blockchain and payment technology providers to explore central bank digital currencies (CBDCs). The program aims to deepen understanding of the benefits and challenges of CBDCs by bringing together key players in the blockchain and payment technology sector.
While Mastercard has not revealed detailed plans for this collaboration, the company has hinted at several important aspects within the CBDC domain. Security, privacy, interoperability, and the significant role of the private sector in driving innovation and efficiency were among the main topics emphasized by the company. Raj Dhamodharan, Mastercard’s Head of Digital Assets and Blockchain, stated:
“As we look ahead toward a digitally driven future, it will be essential that the value held as a CBDC is as easy to use as other forms of money.”
Mastercard is leading an initiative that forms an association of key contributors to CBDC development. Partners include Ripple, known for its CBDC platform; ConsenSys with CBDC project experience; and Fluency, a provider of tokenized asset solutions involved in 23 CBDC initiatives.
Giesecke+Devrient excels with its unique CBDC solution, collaborating closely with the central banks of Ghana and Thailand. Idemia focuses on offline payments, making significant progress in a CBDC project with a Japanese payment service. Consult Hyperion, renowned for its offline payment solutions, brings valuable expertise. The roster is completed by Fireblocks, an institutional custody platform.
In a report by Todayq News on June 24, 2023, it was mentioned that Brazil’s central bank granted authorization to Mercado Bitcoin, the largest local cryptocurrency exchange, to participate in the pilot program for the country’s CBDC, digital real. Mercado Bitcoin, in collaboration with Mastercard and other partners, will contribute to the development of the digital real ecosystem.
Mastercard’s deep involvement in the cryptocurrency space has been evident over the years. However, the company has recently scaled back its activities in this realm. Nonetheless, its unwavering support for CBDCs remains steadfast. The company has actively engaged in collaborative projects with esteemed institutions such as the Bank for International Settlements and the New York Federal Reserve Bank, in addition to its partnerships with individual central banks.
As the global financial landscape continues its digital evolution, Mastercard’s collaborative effort holds the promise of shedding light on the complexities and potentials of CBDCs. By leveraging the collective expertise of these blockchain and payment technology trailblazers, the initiative is poised to carve a path toward more accessible, efficient, and user-friendly CBDCs in the years to come.