Successful trial links Mastercard's multi-token network with Australian CBDC.
Mastercard has just revealed a successful end to its groundbreaking experiment involving wrapped central bank digital currencies (CBDCs).
The trial, completed on October 12th, was conducted in partnership with the Reserve Bank of Australia and other entities. In particular, it demonstrated seamless interoperability between CBDCs and Ethereum-based non-fungible tokens (NFTs).
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The platform deployed for this trial leverages Mastercard's Multi Token Network, which was launched in June 2023. This network merges blockchain technology with Mastercard's payment infrastructure.
According to Mastercard, during the trial, the platform could "lock" the appropriate amount of the pilot CBDC on the RBA's specialized platform and mint an equivalent value of wrapped CBDC tokens on the Ethereum blockchain.
In the official announcement, both parties claimed that the trial's success hinged on specific security measures.
A pre-requisite of the test transaction was that the Ethereum wallets of both the buyer and seller, as well as the NFT marketplace smart contract, were "allow-listed" within the platform. With all other transfers of the wrapped pilot CBDC blocked, it successfully demonstrated the platform’s ability to implement controls – even on public blockchains.
Mintable's CEO and founder, Zack Burcks, offered his insights on the trial's broader implications:
Together with Mastercard, we have identified a use case whereby digital currencies and NFTs can easily be linked, potentially stamping out fraud and theft, ending the loss of documentation and records, and unleashing new possibilities for commerce.
In prior communications, the Reserve Bank of Australia emphasized that an Australian dollar-backed CBDC could pave the way for innovative payment mechanisms and finance sector enhancements not achievable with traditional fiat money. However, the RBA also cautioned that a more exhaustive research phase is necessary to fully grasp the advantages and limitations.
Mastercard's successful test with the Reserve Bank of Australia marks a significant step forward in linking traditional financial systems with blockchain technologies. The experiment proved the efficacy of wrapped CBDCs and demonstrated the potential for secure, interoperable transactions across public blockchains. As CBDCs continue to gain momentum globally, such experiments serve as pivotal milestones in the quest for broader financial innovation.
