Mastercard, in partnership with the Reserve Bank of Australia (RBA) and Australian payment services firm Cuscal, has achieved a successful trial in integrating central bank digital currencies (CBDCs) with Ethereum-based non-fungible tokens (NFTs) using Mastercard's Multi Token Network.
The trial, initiated in June 2023, employed a "wrapped CBDC" approach. It involved locking a specific amount of pilot CBDC on the RBA's platform and creating equivalent wrapped pilot CBDC tokens on the Ethereum blockchain. This was done through a process called "allow-listing" of Ethereum wallets for the buyer, seller, and NFT marketplace smart contract, ensuring specific transactions on public blockchains.
Richard Wormald, Mastercard's Australasia President, confirmed the successful outcome of the trial, emphasizing that it was driven by increasing consumer demand and the need for cross-blockchain commerce. The integration maintained strict controls while transferring CBDC amounts from RBA's platform to Ethereum.
The compliance aspects were facilitated through Mastercard's Multi Token Network and Crypto Credential solutions, focusing on verification standards and scalable interoperability. The project also involved collaboration with Australian companies Cuscal and Mintable.
Zack Burcks, CEO of Mintable, sees CBDC wrapping technology as a way to combat fraud, eliminate document loss, and open up new opportunities for commerce. The RBA shares this view, anticipating that an Australian dollar CBDC could enhance payment arrangements, transaction speed, security, and financial interoperability, expanding the utility of digital currencies.
This trial demonstrated Mastercard's capability to enable CBDC holders to engage in Ethereum-based NFT transactions through an NFT marketplace.
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