Mastercard Releases Proprietary Tool To Central Banks To Test Their CBDC
Mastercard Releases Proprietary Tool To Central Banks To Test Their CBDC
September 10, 2020
Mastercard Releases Proprietary Tool To Central Banks To Test Their CBDC
Mastercard Releases Proprietary Tool To Central Banks To Test Their CBDC
September 10, 2020

Mastercard has announced the release of a proprietary tool targeted to central banks that wish to test their Central Bank Digital Currency (CBDC).

It has been reported by a Bank of International Settlements that over 70% of central banks are entertaining the idea of digital currency in some form.

However, few have moved into actual concept and experimentation, as the tool released by Mastercard aims to make testing simpler.

The tool simulates various types of transaction environments to let central banks evaluate CBDC use-cases, as it mimics the issuance, distribution, and exchange of CBDCs between banks, financial services companies, and consumers.

It has been analyzed that Mastercard called for partners to use the platform to evaluate the effectiveness of CBDC’s technological designs, proposed use cases, and the interoperability with existing payment methods.

One of the possibilities of the virtual sandbox is demonstrating “how a CBDC can be used by a consumer to pay for goods and services anywhere Mastercard is accepted around the world.”

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The report said that CBDCs would allow central banks a direct bridge to consumers, avoiding the necessity to go through commercial banks for distributing and collecting money. Some designs are focusing only on institutional money transfers. Mastercard’s platform appears to be geared for both.

Likewise, Mastercard can often be seen engaging in various types of distributed ledger technology, including an initial commitment to the Libra consortium in 2019. Later that year, the company left the association, primarily citing regulatory headwinds as motivation.

Also, the CEO of Mastercard has been somewhat critical of CBDCs due to their proposed siloed nature.

One of the goals of this tool could be indeed to show central banks the benefits of interoperability, which could perhaps guarantee Mastercard’s continued relevance as payments evolve.

Thus, Mastercard’s research and development often involve blockchain or DLT, while its card division has gradually warmed up to crypto-based cards along with its chief rival Visa.

Source: Cointelegraph | Image: WiBestBroker


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Ishita Bora

Ishita Bora is a Senior Content Creator at Digital Notice Media Labs. She has completed her Master's Degree in Language and Linguistics in 2019 from Gauhati University, India. She is an archetypal writer, who loves to create her own little world with words and locutions. Apart from this, her interest lies in blockchain technology and cryptocurrency space, as she loves writing about blockchain and other blockchain-related articles. Currently, she is working on blockchain-based news, reviews, featured articles, and guides.
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