As Australia progresses in the development of its Central Bank Digital Currency (CBDC), fintech companies are actively exploring the potential use cases of this digital currency. Among the latest entrants into this space is Mastercard, which has partnered with Cuscal and Mintable, an Australian paytech provider and NFT-as-a-Service provider, to tokenize CBDCs on various blockchain platforms.
Mastercard’s solution offers robust controls to ensure that the pilot CBDC is accessible, usable, and redeemable exclusively by authorized parties who have undergone Know Your Customer (KYC) verification and risk assessment by licensed service providers.
In a live demonstration, Mastercard showcased how this solution enabled the holder of a pilot CBDC to purchase an NFT listed on the Ethereum public blockchain. The process involved “locking” the required amount of a pilot CBDC on the Reserve Bank of Australia’s (RBA) pilot CBDC platform and minting an equivalent amount of wrapped pilot CBDC tokens on the Ethereum blockchain.
To execute this test transaction, it was essential that the Ethereum wallets of both the buyer and seller, as well as the NFT marketplace smart contract, were “allow-listed” within the platform. This successful demonstration illustrated the platform’s ability to implement controls effectively, even on public blockchains.
Richard Wormald, Division President, Australasia at Mastercard, commented on this development, noting that as the digital economy continues to evolve, there is growing demand from consumers to engage in commerce across multiple blockchains, including public ones. This technology not only enhances consumer choice but also fosters new opportunities for collaboration between public and private networks, potentially driving meaningful impact in the digital currency sector.
The pilot project leveraged the Multi Token Network, introduced by Mastercard in June 2023, which offers foundational capabilities to facilitate more efficient payment and commerce applications using blockchain technology. It includes the Mastercard Crypto Credential, providing common verification standards and infrastructure for trusted interactions on blockchain networks. This technology also emphasizes interoperability, allowing capabilities across supported payment tokens and networks in a scalable manner.
The Multi-Token Network, currently in beta, plays a pivotal role in Mastercard’s broader strategy to expand the use of blockchain technology across various payment use cases. It enables regulated entities to harness the potential of digital assets and is undergoing pilot testing with select financial institutions worldwide.
This project highlights the potential of solutions within the Multi Token Network to enable new levels of interoperability between blockchains securely. This ease of moving digital currencies through Mastercard’s trusted network could open the door for more consumers to engage in crypto ecosystems, leveraging reputable and reliable forms of digital money that offer programmability, transparency, and compliance.
Zach Burks, CEO and Founder of Mintable, a participant in Mastercard’s Start Path development program, emphasized the groundbreaking potential of NFTs in the CBDC pilot. He highlighted the synergy between digital currencies and NFTs, potentially curbing fraud, document loss, and creating fresh opportunities for commerce.
Nathan Churchward, Domain Lead, Payments at Cuscal, expressed excitement about partnering with Mastercard to shape the future of banking and payments in Australia.
This initiative is a part of the Reserve Bank of Australia’s CBDC pilot project with the Digital Finance CRC (DFCRC), which explored potential use cases for a CBDC in Australia. The pilot project involved issuing a limited-scale ‘pilot’ CBDC, demonstrating innovative payment and settlement services to Australian households and businesses.
