Mastercard announced a successful CBDC trial in partnership with the Reserve Bank of Australia
MasterCard has successfully demonstrated an innovative solution to bundle Central Bank Digital Currencies (CBDCs) across multiple blockchain networks.
This solution was developed as part of a research project with the Reserve Bank of Australia (RBA) and the Digital Finance Collaborative Research Center (DFCRC), a collaboration between Mastercard, Kushkal and Mintable.
The main objective of this initiative, according to MasterCard, is to explore potential CBDC applications in Australia.
The pilot includes strict controls to ensure that CBDC is owned, operated and operated by authorized entities only through Know Your Customer (KYC) verification and risk assessment by licensed service providers.
This gives consumers enhanced security and ease when engaging in various blockchain transactions.
MasterCard demonstrated the program in a live environment, offering pilot CBCC holders the ability to purchase a non-explosive token (NFT) listed on the Ethereum public blockchain.
The process involves locking the required amount of pilot CBCC on the RBA CBCC platform and creating a capped pilot CBCC token of the same amount on the Ethereum network.
Additionally, this pilot program leveraged two fundamental aspects of the Multi Token Network introduced by MasterCard in June 2023.
This network provides a framework for more efficient payment and business applications using blockchain technology.
This Mastercard crypto-credential is a system that develops common authentication standards and an infrastructure for secure interaction on blockchain networks.
In addition, it provides interoperability, enabling scalable use of capabilities across multiple supported payment tokens and networks.
Mastercard further emphasized that the critical requirement for this verification transaction is the Ethereum wallet of both the buyer and the seller as well as the NFT marketplace smart contract.
Zach Berks, CEO and Founder of Mintable, commented on the partnership:
“In partnership with MasterCard, we have identified a scenario where digital currencies and NFTs can be seamlessly integrated, potentially eliminating fraud and theft, eliminating the risk of losing documents and records, and opening up new business opportunities.”
Australia's central bank has completed its CBDC pilot program
The Central Bank of Australia has been actively exploring the potential benefits of CBDCs for the country.
Ahead of the recently wrapped CBDC trial, the Reserve Bank of Australia completed its own CBCC trial.
In the year A 44-page report from the Bank and Digital Finance Cooperative Research Center on August 23 revealed their conclusions.
The pilot program identified four key areas where the CBDC could bring about improvements.
One of these includes facilitating “smart” payments by enabling complex payment arrangements that are not supported by existing payment systems.
The study also highlights how CBCC can stimulate innovation in the expanding private digital currency sector, support financial innovation in debt securities markets, and improve inclusion and affordability in the broader digital economy.
The report also lists proposals from the 16 companies participating in the pilot program, highlighting the benefits of CBCC in enabling “atomic settlements,” a simultaneous, real-time transaction agreement.
In addition, CBDC program efficiency is cited as an improvement that can increase efficiency and reduce risk in various complex business processes.
However, the analysis concluded that although its implementation could improve efficiency and robustness in certain Australian payments ecosystems, more research is needed to fully explore the potential benefits of CBDC.
