Mastercard, in collaboration with the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC), has unveiled a pioneering solution that fosters the interoperability of Central Bank Digital Currencies (CBDCs) across diverse blockchain networks, aiming to bolster Web3 commerce both within Australia and globally.
The venture represents a significant stride towards the harmonization of CBDCs with various blockchain ecosystems, ensuring their utilization by authorized entities in a secure manner. The technology demonstrated by Mastercard allows CBDCs to be tokenized, or “wrapped,” onto different blockchains, thereby expanding consumers’ ability to engage in commerce across multiple blockchain platforms securely and effortlessly. This initiative is part of a broader RBA and DFCRC project to explore the possible applications of a CBDC in Australia.
A notable aspect of this endeavor was a live demonstration where a holder of a pilot CBDC could purchase a Non-Fungible Token (NFT) listed on the Ethereum public blockchain. The process entailed the “locking” of the requisite amount of the pilot CBDC on the RBA’s pilot CBDC platform, followed by the minting of an equivalent amount of wrapped pilot CBDC tokens on Ethereum. It was imperative that the Ethereum wallets of both the buyer and seller, along with the NFT marketplace smart contract, were ‘allow-listed’ within the platform, showcasing the platform’s capacity to enforce controls, even on public blockchains.
The pilot leverages Mastercard’s Multi Token Network, introduced in June 2023, which provides a set of fundamental capabilities aimed at enabling more efficient payment and commerce applications using blockchain technology. By facilitating easy on-demand movement of digital currencies via Mastercard’s trusted network, more consumers could partake in crypto ecosystems using reliable forms of money, while reaping the benefits such as programmability and transparency that these currencies offer.
Notably, the interoperability between blockchains as demonstrated in this project could unlock new avenues of collaboration between public and private networks, thereby driving impactful advancements in the digital currency domain. Furthermore, the broader utilization of blockchain technology across various payments use cases aligns with Mastercard’s strategy to extend the functionality available in digital assets to regulated entities.
The participation of entities like Mintable and Cuscal in this pilot, alongside Mastercard, signals a progressive stance towards exploring innovative digital currency applications, potentially revolutionizing commerce, fraud prevention, and documentation processes
Image source: Shutterstock