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Mastercard Enables CBDC tokenization
MasterCard has unveiled a new technology tailored for central bank digital currencies (CBDCs) to revolutionize the digital currency landscape. The core vision of this pioneering technology is to facilitate the tokenization, or "wrapping," of CBDCs onto various blockchain networks.
As per reports, a variety of capabilities are available through the technology, including enforcing transaction control on public blockchain networks. It achieves this by limiting the wrapped CBDC, allowing it to be sent only to pre-approved "allow-listed" Ethereum wallets, thereby ensuring a higher level of security and compliance.
By doing so, it promises to deliver a host of benefits, primarily focusing on enhancing consumer convenience and transactional security.
The solution incorporates a series of controls that ensure the pilot CBDC can only be held, used, and redeemed by authorized entities. These entities must undergo rigorous Know Your Customer (KYC) verification and risk assessment processes, all performed by licensed service providers.
This endeavor is the result of a collaborative effort between Mastercard, Cuscal, and Mintable. It is part of a research project initiated by the Reserve Bank of Australia (RBA) and Distributed Financial Crimes Research Collaborative (DFCRC). The objective is to explore the potential use cases for a CBDC within the Australian context.
A Live Demonstration of Possibilities
Mastercard showcased the potential of this innovative CBDC technology through a live demonstration. During this demonstration, the holder of a pilot CBDC was able to purchase a non-fungible token (NFT) listed on the Ethereum public blockchain.
The process involved "locking" the required amount of the pilot CBDC on the RBA's pilot CBDC platform and, in turn, minting an equivalent amount of wrapped pilot CBDC tokens on the Ethereum network.
The demonstration utilized Mastercard Crypto Credentials, a set of verification standards and infrastructure, as well as interoperability, which extends support across supported payment tokens and networks.