As the global economy races to embrace digital payments, Central banks aren’t left behind but are keeping the same pace to digitalize their currencies. In connection to this, on Wednesday 10th, September MasterCard launched a virtual testing environment for Central banks to assess the viability of introducing the proposed Central Bank’s Digital Currencies (CBDCs) into the economy.
The platform is intended to stimulate, distribute and exchange CBDCs between financial service providers and banks as well as enabling end-user to use MasterCard as a daily means of payment for goods and services. The platform will also evaluate the compatibility of existing non-digitalized payment rails including Visa, PayPal, Pioneer among others. Besides, it will compare and analyze a variety of CBDCs tech stacks.
On an interview with Forbes, Mastercard’s executive VP Raj Dhamodharan said, his firm is putting the best foot forward to collaborate with not only central banks but also other payment entities including national and commercial banks. MasterCard being Facebook’s Libra Association co-founder, a company that is now a catalyst in accelerating digitalization of currencies prior to its legal regulation approvals.
Talking to World Economic Forum, Sheila Warren, the Head of Blockchain, Digital Assets said the success of MasterCard will depend on collaboration between the public and private sectors in their effort to explore CBDCs that will aid banks to understand the capability in respective digital currencies.
To echo the significance of its newly launched platform, Mastercard pin pointed a survey research by Bank of International Settlement (BIS), revealing that about 80% of banks are past the experimental stage, and are willing to join the Mastercard initiative.
Alongside its major rival Visa, MasterCard made up its mind to quit Libra in October 2019, after failing to agree with some of Libra’s legal obligation and business model. Visa Card that has already integrated with Coinbase said in July it will do everything within its reach to support major milestones aimed to smoothen the road towards the democratization of cryptocurrencies such as MasterCard platform that is intended to bring CBDCs into the limelight.