Mastercard demonstrates interoperable CBDC for trusted Web3 commerce in Australia and beyondOctober 12, 2023 | Sydney, Australia
Mastercard’s participation in the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre’s (DFCRC) central bank digital currency (CBDC) pilot project explored potential use cases for a CBDC in Australia
Through the project, Mastercard has demonstrated technology that would enable CBDCs to interoperate with different blockchains and be leveraged by authorized parties in a safe and secure way
Mastercard today announced that it has successfully demonstrated capabilities of a new solution that enables CBDCs to be tokenised (or “wrapped”) onto different blockchains, providing consumers with a new option to participate in commerce across multiple blockchains with increased security and ease.
The solution, developed in partnership with Cuscal and Mintable as part of a RBA and DFCRC research project to explore potential use cases for a CBDC in Australia, includes controls ensuring that the pilot CBDC can be held, used, and redeemed only by authorised parties that have been Know Your Customer (KYC) verified and risk assessed by licensed service providers.
“As the digital economy continues to mature, Mastercard has seen demand from consumers to participate in commerce across multiple blockchains, including public blockchains. 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,” said Richard Wormald, division president, Australasia at Mastercard.
Mastercard demonstrated in a live environment how the solution could enable the holder of a pilot CBDC to purchase a NFT listed on the Ethereum public blockchain. The process “locked” the required amount of a pilot CBDC on the RBA’s pilot CBDC platform and minted an equivalent amount of wrapped pilot CBDC tokens on Ethereum.
A pre-requisite of the test transaction was that the Ethereum wallets of both the buyer and seller, as well as the NFT marketplace smart contract, were ‘allow-listed’ within the platform. With all other transfers of the wrapped pilot CBDC blocked, it successfully demonstrated the platform’s ability to implement controls – even on public blockchains.
The pilot leveraged two pillars of Multi Token Network, which Mastercard introduced in June 2023 as a set of foundational capabilities designed to enable more efficient payment and commerce applications using blockchain technology. This includes Mastercard Crypto Credential which offers a set of common verification standards and infrastructure to enable trusted interactions using blockchain networks, in addition to interoperability to offer capabilities across all supported payment tokens and networks in a scalable manner.
Mastercard Multi-Token Network, which is currently in beta, plays a key role in Mastercard’s wider strategy to expand the use of blockchain technology across several payments use cases. It will allow regulated entities to take advantage of the functionality available in digital assets and is currently being piloted with select financial institutions around the world.
“As demonstrated in this project, the solutions that play a key role in Multi Token Network have the potential to enable new levels of interoperability between blockchains, in a safe and secure manner. 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,” added Wormald.
Zack Burks, CEO and Founder of Mintable, a participant in Mastercard’s Start Path development program, said: “The vast potential of NFTs was obvious during this progressive CBDC pilot. 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. Mintology, Mintable's B2B arm, is making NFTs more accessible and more valuable with innovative new uses. While digital currencies are in their infancy, NFTs are already being used for new media, gamification, digital identities, loyalty programs, ticketing, authentication, certification, and more.”
Nathan Churchward, Domain Lead, Payments at Cuscal, added: “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.”
The RBA’s CBDC pilot project with the DFCRC explored potential use cases for a CBDC in Australia. The project involved the RBA issuing a limited scale ‘pilot’ CBDC that was a real legal claim on the RBA. The pilot CBDC was used by selected industry participants to demonstrate how a CBDC could be used to provide innovative payment and settlement services to Australian households and businesses. For more details on Mastercard’s use case as part of the project, visit the DFCRC website.
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Mintable is an NFTs-as-a-service provider built for simplicity, security, and trust by a team of experienced leaders, backed by international investors. Established as an NFT marketplace attracting more than 100,000 creators a month, Mintable is pioneering profound new uses for NFTs, as products, services, contracts, guarantees, and more, in collaboration with household-name organisations and brands from across the US, Europe and Asia. Mintable’s expertise, acquired from its time at the forefront of early adoption, have helped it to reforge the NFT into a multi-dimensional digital utility with wide ranging, everyday applications for new media, gamification, digital identities, loyalty programs, ticketing, authentication, certification, and more.
Cuscal is a leading payments and regulated data services provider in Australia. We offer a comprehensive suite of payment infrastructure solutions to a diversified client base. We enable a range of payment types from physical cards to real-time payments in the payments value chain and are constantly evolving our offerings to meet the demands of a rapidly changing economy. Cuscal’s history is marked by a long and successful track record of being a first mover and early adopter of payment and regulated data solutions, enabling our clients to offer market leading products to their customers. AS an ADI (Authorised Deposit taking Institution), Cuscal is uniquely positioned to offer increased capability and end-to-end functionality to support our clients and their customers keep pace in a rapidly changing digital landscape.
About Mastercard (NYSE: MA)
Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.