Mastercard’s Australian CBDC exploration

Fintech companies are investigating the potential applications of Australia’s central bank digital currency (CBDC), which is currently under development. Mastercard is the most recent to follow suit, collaborating with Cuscal and Mintable, the Australian paytech and NFT-as-a-Service providers, to tokenize CBDCs across several blockchains.

Only approved parties will be able to hold, use, and redeem the pilot CBDC thanks to controls built into the Mastercard solution. those that have undergone risk assessment and know your customer (KYC) verification by authorised service providers.

In a real setting, Mastercard gave an example of how the solution may make it possible for the owner of a pilot CBDC to buy an NFT that is listed on the Ethereum public blockchain. The procedure created an equivalent number of wrapped pilot CBDC tokens on Ethereum and “locked” the necessary quantity of a pilot CBDC on the RBA’s pilot CBDC platform.

The buyer and seller’s Ethereum wallets, as well as the NFT marketplace smart contract, had to be “allow-listed” on the platform in order for the test transaction to proceed. The platform’s ability to impose constraints, even on public blockchains, was effectively proven by blocking all other transfers of the wrapped pilot CBDC.

“Mastercard has observed consumer interest to engage in commerce across numerous blockchains, including public blockchains, as the digital economy continues to evolve. According to Mastercard’s division president for Australasia, Richard Wormald, “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.”

The Multi Token Network’s Assistance

The trial made use of two of Multi Token Network’s pillars, which Mastercard unveiled in June 2023 as a collection of fundamental features intended to make blockchain-based payment and commerce applications more effective.

Among these is Mastercard Crypto Credential, which provides a framework and a set of uniform verification requirements to facilitate safe interactions with blockchain-based networks. Furthermore, it facilitates interoperability, which provides scalable capabilities across all accepted payment tokens and networks.

The Mastercard Multi-Token Network, which is presently in beta testing, is an integral part of Mastercard’s broader plan to increase the application of blockchain technology in a number of payment use cases. It is presently being piloted with a few global financial institutions and will enable regulated companies to benefit from the capabilities found in digital assets.

The technologies that are essential to Multi Token Network have the power to allow for new degrees of safe and secure blockchain interoperability, as this project has shown. Wormald continued, “More consumers could participate in crypto ecosystems using trustworthy and reliable forms of money while enjoying the benefits that these currencies offer, such as programmability, transparency, and compliance, by making it simple for people to move digital currencies on-demand via Mastercard’s trusted network.”

laying the foundation for Australian banking’s future

The CEO and creator of Mintable, Zach Burks, who took part in Mastercard’s Start Path development programme, stated: “This progressive CBDC pilot demonstrated the enormous potential of NFTs.” We have discovered a use case with Mastercard wherein digital currencies and NFTs may be connected with ease, potentially eliminating fraud and theft, putting an end to the loss of documents and records, and opening up new avenues for business.

“With creative new applications, Mintology, Mintable’s B2B division, is increasing NFTs’ value and accessibility. NFTs are already being utilised for new media, gamification, digital identities, loyalty programmes, tickets, authentication, certification, and more, even if digital currencies are still in their infancy.

“It’s exciting to be able to further partner with Mastercard to support the future of banking and payments in Australia,” said Nathan Churchward, domain lead for payments at Cuscal.

Potential applications for a CBDC in Australia were investigated as part of the Reserve Bank of Australia’s (RBA) CBDC pilot project with the Digital Finance CRC (DFCRC). As part of the initiative, the RBA issued a limited-edition “pilot” CBDC, which constituted an actual legal claim against the RBA. Selected industry participants used the pilot CBDC to show how a CBDC could be used to offer Australian homes and businesses cutting-edge payment and settlement services.