Crypto-Mastermind summary:
-
Via a new test platform, Mastercard wants to increase the central banks' commitment to CBDCs. The tool will enable banks, financial service providers and consumers to jointly simulate the issuance, distribution and exchange of CBDCs.
-
The platform will be used to investigate possibilities for the use of digital currencies in everyday life. For example, the compatibility with existing payment systems such as card payments will be assessed.
-
Mastercard and its competitor Visa already announced further steps in the crypto area in July. A key aspect of this concerns crypto payment cards.
The gigantic payment service provider Mastercard is going on the offensive. Central banks are getting help in testing their own digital currencies via a newly released virtual test platform. With this, Mastercard wants to promote the commitment to CBDCs and support banks in understanding and researching them. With the test kit, central banks will be able to evaluate whether CBDCs are suitable for them and whether local or regional issuance is possible.
Test platform to bring central banks closer to CBDCs
As a BIS report shows, over 80% of central banks worldwide are currently considering the introduction of CBDCs. However, only a few are actively researching possible applications or have already started to develop their own concepts. With its toolkit, Mastercard wants to encourage more banks to actively deal with digital currencies. The virtual test environment should help the banks to implement their considerations.
Via the platform, banks, financial service providers and consumers should be able to jointly simulate the issuance, distribution and exchange of CBDCs. Customer-specific use cases are also to be assessed. The company commented on this as follows:
"The virtual platform can be individually customized to the environment in which the central bank operates, allowing them to ... simulate a CBDC issuance, distribution and exchange ecosystem with banks and consumers, including how a CBDC can interface with existing payment networks and infrastructures - e.g., cards and real time payments."
A major goal of the project is to show how CBDCs can be used in everyday life and what can be applied in the market. Furthermore, it will also be used to assess the compatibility with already existing payment methods such as cards. An analysis and comparison possibility of different technology stacks is also included. Executive Vice President of Mastercard, Raj Dhamodharan says:
"Central banks have accelerated their exploration of digital currencies with a variety of objectives, from fostering financial inclusion to modernizing the payments ecosystem."
With CBDCs, central banks would have the possibility of a direct bridge to consumers without intermediary commercial banks. The Mastercard platform seems to be designed for these as well as purely institutional areas.
Payment service providers advocate cryptocurrencies and blockchain
Mastercard was already active in this area last year as a member of Facebook's Libra Consortium. The company was even one of the founding members back then. Together with its competitor Visa, however, Mastercard later left the Libra Consortium due to regulatory difficulties.
But this does not mean inactivity. The company is still strongly involved in the crypto-sector. In July, for example, expansions of its own cryptocurrency program were announced. These are to bring safe and law-conformal crypto payment cards into circulation.
The research of Mastercard is mainly concerned with blockchain and DNT. Meanwhile, the payment card department as well as competitor Visa is becoming increasingly involved in cryptocurrencies in this area.
Visa already offers payment cards for Coinbase. Also in July, the company announced, that it would continue to support digital currencies and blockchain-technology due to its popularity with customers. According to a report, Visa has also recently introduced its own platform independent approach to cryptocurrencies and blockchain.
The commitment of payment service providers in this area is definitely noteworthy. The acceptance of the central banks also seems to increase more and more and is actually being implemented in own projects. Many of these projects are still in their infancy. However, the strong interest in this area could drive progress.
Posted from Crypto Mastermind Go to the original article
Warning! This user is on our black list, likely as a known plagiarist, spammer or ID thief. Please be cautious with this post!
If you believe this is an error, please chat with us in the #appeals channel in our discord.