Weekly SmartPills #21
MASTERCARD ON THE WORKS OF CBCD
On August 17, Mastercard announced the launch of massive partnerships with 7 blockchain technology providers in order to improve the much-debated central bank digital currencies (CBDCs). The company believes that CBDCs have the potential to revolutionize the way people and businesses make payments and is working to develop solutions that allow CBDCs to be used in a safe and convenient way.
Among these are several giants of the cryptocurrency world that have already worked with central banks: Ripple, ConsenSys, Fluency, and many others.
Raj Dhamodharan, head of the blockchain sector, stated: “As we look to a future driven by digital technology, it will be essential that the value held in the form of CBDCs is as easy to use as other forms of money.”
Both Mastercard and Visa are delaying the launch of certain cryptocurrency-related products. This is due to market conditions and the still turbulent regulatory environment. Reportedly, the delays are a result of the collapse and failures of digital asset custody companies such as Celsius, FTX, Three Arrows Capital, Voyager Digital, and others.
It is not uncommon to see Mastercard working side by side with blockchain service providers. As early as last February, we saw the birth of the Mastercard-Immersve partnership. Their synergy uses decentralized protocols to settle cryptocurrency transactions in real time at points of sale that accept Mastercard payments online.
Looking back, we can see how Mastercard has already been involved multiple times in the world of CBDCs.
In 2020, Mastercard launched a pilot project to test the use of the Chinese CBDC, the digital yuan. The project was carried out in collaboration with the People’s Bank of China and involved a number of financial institutions and technology companies. The project was successful and demonstrated that CBDCs can be used to make payments quickly and securely.
Currently, it has collaborated with the Canadian government to develop a solution that allows banks to use the Canadian CBDC, the digital loonie. Mastercard has also worked with the Bank of England to develop a solution that enables businesses to use the British CBDC, the digital pound. In short, Mastercard is not standing still, and like Visa, it is rolling up its sleeves to keep up with technology.