On Sept 9, Mastercard announced a Central Bank Digital Currency (CBDC) virtual testing environment for central banks. The platform is designed to help central banks evaluate the use cases of CBDCs. The central banks can use the platform to simulate the complete CBDC lifecycle. This will include issuing, distributing, and exchanging CBDCs with various stakeholders.
Mastercard has now invited central/commercial banks, along with tech/advisory firms, to partner with the virtual CBDC testing platform. With these partnerships, Mastercard would create a complete CBDC testing ecosystem that will take consumer and business requirements into consideration.
As a matter of fact, Mastercard has always played a pivotal role in the development of the digital economy and moving to CBDCs was an obvious step. With the virtual CBDC testing ecosystem, Mastercard is trying to assist central banks to build practical digital currencies in a safe and secure manner.
Banks interest in CBDCs
According to a recent 66 central bank survey conducted by the Bank for International Settlements, 53 banks have engaged with CBCD development in one way or the other. Furthermore, roughly 26 of the banks are already experimenting with the design and concept of a CBDC.
The list included central banks from Australia, France, China, India, Japan, Switzerland, Spain, Singapore, and other countries. The central banks surveyed represent 90% of the economic output of the world and 75% of the world’s population.
Customizable and scalable platform
Mastercard understands that every bank has a different approach towards a CBDC. That is why it has built the platform in such a way that central banks can customize it according to their regional requirements. The central banks can custom simulate the issuance of a CBDC, evaluate the technology for regional market feasibility, and test the design and security aspects.
Raj Dhamodharan, an executive vice president of Mastercard, notes the platform will help central banks make CBDC-related decisions now.
A piece of the action
In its official blog, Mastercard mentioned that the testing platform will help central banks demonstrate how a CBDC can be used by consumers for payment wherever Mastercard is used. Mastercard has been moving further into the crypto space. Now it appears they are leveraging their wide acceptance into this CBDC platform.
Mastercard making such a major move is a piece of big news! Then there is DeFi, which is making a lot of noise. Here is why we think the current DeFi explosion is just the beginning.
