Mastercard Launches a Customizable CBDC Testing Platform

Mastercard, one of the world’s largest payment network processors, has launched a customizable central bank digital currencies (CBDC) testing platform for banks to access and explore digital currencies as part of their drive to help modernize payment systems according to a press release on Sep 9. 

A Test Environment to Fast-track CBDC Rollout

The virtual testing environment will simulate the issuance, distribution, and exchange of CBDCs between banks, financial service providers, and consumers. 

Through the platform, central banks will demonstrate how consumers will pay for goods and services anywhere in the world where Mastercard is accepted. 

The payment processor is now inviting banks, tech, and advisory groups to partner as to help assess its design, validate use cases, and evaluate its interoperability with existing rails.

The testing platform is perfect for central banks, regulators, and even advisory groups to not only explore CBDCs but enable them to roll-out strategies within a test environment. It is also timely. With digitization and the effects of the coronavirus pandemic, CBDC’s experimentation has been accelerated. 

Raj Dhamodharan, Executive Vice President, Digital Asset and Blockchain Products and Partnerships, Mastercard, commented, saying:

“Central banks have accelerated their exploration of digital currencies with a variety of objectives, from fostering financial inclusion to modernizing the payments ecosystem. This new platform supports central banks as they make decisions now and in the future about the path forward for local and regional economies.”

Digitizing Fiat in a Modernization Drive

As per surveys, the payment network processor notes that most banks are already exploring how they can blend CBDCs with existing traditional infrastructure while ensuring continuity without destabilizing its financial system. 

A harmonious co-existence between digital currencies–which are redeemable for fiat, is vital since therein, governments can not only implement fitting monetary policies but through the digitization of their fiat, there will be better oversight and traceability, helping prevent money laundering.

Considering these advantages, governments are exploring different CBDC use cases but most are stuck in conceptual stages. Only but a few central banks—most noteworthy being the PBoC, are piloting their programs though with caution. 

As BTCManager earlier reported, Japan is fast-tracking its CBDC development in response to China’s progress.

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