Mastercard Completes Successful CBDC Wrapping Experiment on Blockchain
Mastercard’s Successful CBDC Wrapping Experiment
Mastercard (NYSE:) recently announced the successful completion of an experiment involving the wrapping of central bank digital currencies (CBDCs) on various blockchains. This wrapping process is similar to the wrapping of wBTC and wETH.
The experiment, conducted in collaboration with the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre CBDC, involved the participation of Cuscal and Mintable. The innovative solution allowed CBDC owners to purchase a listed non-fungible token (NFT) on a live platform. Mastercard explained that the process involved locking a specific amount of a pilot CBDC on the RBA’s experimental platform and minting an equivalent amount of wrapped CBDC tokens on Ethereum.
Mastercard’s Multi Token Network, introduced in June 2023, was utilized in this solution, integrating payment technology with blockchain. By linking digital currencies and NFTs, the collaboration aims to eliminate fraud and theft, prevent loss of documents and records, and unlock new possibilities for trade.
Enhancing Blockchain Security
The experiment required the Ethereum wallets of both the buyer and seller, as well as the NFT marketplace smart contract, to be allow-listed within the platform. By blocking all other transfers of the wrapped pilot CBDC, the transaction successfully demonstrated the platform’s ability to implement controls, even on public blockchains.
Positive Industry Implications
The successful wrapping of CBDCs on blockchain opens up new opportunities for the financial industry. By leveraging Mastercard’s technology, digital currencies and NFTs can be securely linked, paving the way for enhanced trade possibilities and eliminating potential risks.
Zack Burcks, CEO and founder of Mintable, expressed enthusiasm about the collaboration, stating, “Together with Mastercard, we have identified a use case where digital currencies and NFTs can be easily connected, potentially eliminating fraud and theft, putting an end to document and record loss, and unlocking new possibilities for trade.”
Mastercard’s experiment marks a significant milestone in the advancement of CBDCs and blockchain technology, showcasing the potential for secure and efficient digital transactions in the future.
