Mastercard has introduced a novel partnership initiative aimed at investigating the potentials and constraints of central bank digital currencies (CBDCs).
Under this collaborative effort, seven prominent crypto and FinTech firms, including Ripple and Consensys, will collaborate to explore the integration of CBDCs with commonly used payment mechanisms, identify specific challenges they could address, and assess their suitability for the task.
In pursuit of these objectives, Mastercard intends to cultivate industry-wide cooperation through its newly established partner program, which involves companies like Fluency, Idemia, Consult Hyperion, Giesecke+Devrient, and Fireblocks.
Raj Dhamodharan, Head of Digital Assets and Blockchain at Mastercard, emphasised the importance of payment choice and interoperability across various payment methods in a thriving economy. He remarked, “As we look ahead toward a digitally driven future, it will be essential that the value held as a CBDC is as easy to use as other forms of money.”
According to Mastercard, there are multiple issues to explore within this partnership as the CBDC technology matures. The corporation noted that while the Bank for International Settlements (BIS) anticipates up to 24 central bank digital currencies to be in circulation by the end of the decade, more than two-thirds of central banks indicate that they are unlikely to introduce a digital currency for everyday transactions in the near future.
Mastercard’s proactive engagement in this exploration will encompass a range of activities. For instance, Fluency will focus on building interoperability among different CBDCs, Consult Hyperion will collaborate with central banks and payment processors to define CBDC requirements, and Ripple will partner with the Republic of Palau to launch a government-issued national stablecoin.
In sum, Mastercard’s newly formed partnership program seeks to delve deeply into the evolving landscape of central bank digital currencies, fostering collaboration among key players to understand their potential role and implications in the financial ecosystem.
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