Global payments company Mastercard MA derived a solution wherein central bank digital currency (CBDC) will be allowed to be tokenized on different blockchains. This will expand the available payment options for consumers.
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The solution is part of a digital currency project adopted by the Reserve Bank of Australia (RBA). The process involves the required amount of the pilot CBDC to get locked on the RBA's pilot CBDC platform. Thereafter, an equal amount of tokenized pilot CBDC is minted on Ethereum assisting in transaction completion.
Richard Wormald, division president, Australasia at Mastercard, said this project will expand consumer choice and build the collaboration between public and private networks thereby having a major impact in the digital currency space.
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The solution was developed by the combined effort between Mastercard, Cuscal and Mintable for a research project initiated by the RBA and the Digital Finance Cooperative Research Centre (DFCRC).
This new solution’s capabilities were demonstrated in a live verification environment. It is known that holders of a pilot central bank digital currency will be enabled to purchase non-fungible tokens (NFTs) listed on the Ethereum public blockchain.
Stringent controls will be implemented to ensure that the pilot CBDC can only be held, utilized, and redeemed by authorized entities who have cleared the Know Your Customer (KYC) verification and risk assessments which will be carried out by licensed service providers.
The pilot transaction leveraged the strengths of Mastercard’s Multi Token Network, introduced in June 2023, consisting of two main pillars: Mastercard Crypto Credential and interoperability.
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