On Wednesday, the global technology company in the payments industry, Mastercard, launched an innovative virtual and custom testing platform that would allow financial service providers and consumers to evaluate use cases and test roll-out strategies for Central Bank Digital Currencies.
Mastercard Launches Central Bank Digital Currencies (CBDCs) Testing Platform, Enabling Central Banks to Assess and Explore National Digital Currencies @Mastercard #CBDC #digitalcurrency https://t.co/2TlQsHrs5G— Central Bank Payments News (@cbpaymentsnews) September 9, 2020
According to the source, the platform enables the simulation of issuance, distribution, and exchange of CBDCs between banks, financial service providers, and consumers. Central banks, commercial banks, and tech and advisory firms are invited to partner with Mastercard to assess CBDC tech designs, validate use cases and evaluate interoperability with existing payment rails available for consumers and businesses today.
Mastercard’s Executive Vice President for Digital Asset and Blockchain Products and Partnerships, Raj Dhamodharan, said in a prepared statement that, “central banks have accelerated their exploration of digital currencies with a variety of objectives, from fostering financial inclusion to modernizing the payments ecosystem." He added that the company is “driving innovation with the public sector, banks, fintechs, and advisory firms in the exploration of CBDCs, working with partners that align to our core values and principles.” The executive believes that this initiative supports central banks, especially in terms of decision-making on local and regional economies now and shortly.
CBDCs would allow central banks a direct bridge to consumers, avoiding the necessity to go through commercial banks for distributing and collecting money. Some designs are, however, focusing only on institutional money transfers. Mastercard’s platform appears to be geared for both. The company’s research and development often involve blockchain or DLT, while its card division has gradually warmed up to crypto-based cards along with its chief rival Visa, said Cointelegraph.