Mastercard Launches Central Bank Digital Currencies Testing Platform

Mastercard Launches Central Bank Digital Currencies Testing Platform

by September 10, 2020

Mastercard announced a proprietary virtual testing environment for central banks to evaluate Central Bank Digital Currencies (CBDC) use cases.

The platform enables the simulation of issuance, distribution and exchange of CBDCs between banks, financial service providers and consumers.

As every central bank differs in its exploration of CBDCs, and the platform can be explored to determine whether CBDCs fit with the needs of a region or country. The virtual platform can be customised to the environment in which a central bank operates.

Central banks, commercial banks, as well as 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.

CBDCs are designed to be equivalent in value to a nation’s paper currency and subject to the same government-backed guarantees. In addition to printing money, central banks can issue CBDCs as a digital representation of a country’s fiat currency.

With the global economy racing to embrace digital payments, central banks also are looking to the future and investigating how to support innovation while maintaining monetary policy and financial stability as they issue and distribute currency.

In fact, 80% of central banks surveyed are engaging in some form of digital currency work, and about 40% of central banks have progressed from conceptual research to experimenting with concept and design, according to a recent survey by the Bank for International Settlements.

Raj Dhamodharan

Raj Dhamodharan

“Central banks have accelerated their exploration of digital currencies with a variety of objectives, from fostering financial inclusion to modernising the payments ecosystem,”

said Raj Dhamodharan, Executive Vice President, Digital Asset and Blockchain Products and Partnerships, Mastercard.

“Mastercard is driving innovation with the public sector, banks, fintechs, and advisory firms in the exploration of CBDCs, working with partners that are aligned to our core values and principles. This new platform supports central banks as they make decisions now and in the future about the path forward for local and regional economies,”

Dhamodharan added.