MasterCard has announced a successful demonstration of an innovative solution that allows the packaging of central bank digital currencies (CBDCs) on multiple blockchain systems. This pioneering solution comes within the framework of cooperation between several companies, namely: MasterCard, Cuscal, and Mintable as part of a research project conducted in cooperation with the Bank of... The Reserve of Australia (RBA) and the Digital Finance Cooperative Research Center (DFCRC).
According to MasterCard, the main goal of this initiative is to explore potential applications for the Australian central bank digital currency, and this initiative adheres to strict controls to ensure that the beta version of the central bank digital currency can only be owned, used, or even redeemed by approved entities. It has undergone a special verification of the identities of those responsible for it (KYC) and a risk assessment by licensed service providers, which increases the degree of security of transactions across various transaction networks and makes them less complicated for consumers.
MasterCard presented a demo of the program simulating its use on the ground to illustrate how the beta version of the central bank digital currency can be used by its owners to purchase available non-fungible tokens (NFTs) on the public Ethereum blockchain.
This process involves locking a specific amount of Australian central bank digital currencies through the RBA's experimental CBDC platform in exchange for generating a similar number of experimental rolled currencies of the same central bank based on the Ethereum blockchain.
In addition, this pilot program benefited from two basic aspects of the multi-currency transaction network that MasterCard introduced last June, as this network provided a framework for the work of payment and trade applications, which contributes to raising their efficiency through the use of leading blockchain technologies.
This framework includes the Mastercard Crypto Credential system, which sets common verification standards and establishes an infrastructure for secure transactions on the blockchain. This system also provides interoperability for various payment systems, which in turn allows its capabilities to be exploited across many digital currencies and transaction networks that support the payment feature in a scalable manner.
For its part, MasterCard emphasized one of the necessary requirements for completing this experimental transaction, which is digital wallets based on the Ethereum Blockchain for both sellers and buyers, in addition to emphasizing the role of the smart contract for non-fungible token store transactions.
Zack Burcks, founder and CEO of Mintable, commented: “In collaboration with MasterCard, we have been able to define a scenario where we can integrate cryptocurrencies into NFT transactions very easily, which can play a role in reducing “Fraud and theft, eliminating the risks associated with loss of documents and records, as well as unlocking new possibilities in business transactions.”
Australia's central bank completes its pilot program for its own central bank digital currency
The Australian Central Bank has made active efforts to explore the potential benefits of using its central bank digital currency by the Australian people, as the Reserve Bank of Australia has completed experiments on its central bank digital currency, followed by conducting the latest experiments on wrapped central bank digital currencies (CBDCs).
On August 23, the Reserve Bank of Australia, in cooperation with the Cooperative Research Center for Digital Finance, published the results of their tests in a 44-page report. The pilot program identified four areas that could be improved if CBDCs were used, including facilitating “smarter” payments. “By allowing greater arrangements for complex payment transactions that are not supported by current payment systems.
The research also shed light on the role of the central bank digital currency (CBDC) in stimulating the growing private sector innovations in the field of digital currencies, in addition to supporting the innovations of financial solutions, specifically in debt stock trading markets, while raising the level of comprehensiveness and flexibility of the digital economy as a whole.
As stated in this report, several proposals were mentioned from the 16 companies participating in the pilot program, as the proposals emphasized the potential benefits of using central bank digital currencies (CBDCs) in the field of “instant settlement of transactions”, so that these Transactions simultaneously and instantly.
The report described the central bank’s digital currency programming mechanism as an area for adding potential improvements because of its role in improving the standard of efficiency and reducing risks in many complex commercial transactions. The analysis also stressed - in its conclusion - the importance of conducting further research to determine the potential benefits from the uses of currencies. The digital currency for central banks will be fully implemented, with emphasis on the possibility of raising the standards of efficiency and flexibility in specific aspects of the Australian technical system for payment operations if the Australian central bank digital currency is used.
