Mastercard has successfully completed an experimental trial in partnership with the Reserve Bank of Australia (RBA) and Australia’s Digital Finance Cooperative Research Centre CBDC. The groundbreaking trial aimed to explore the feasibility of wrapping central bank digital currencies (CBDCs) on multiple blockchain platforms, a concept similar to wrapped Bitcoin (wBTC) and wrapped Ether (wETH) on the Ethereum blockchain.
Utilizing Mastercard’s Multi Token Network, a platform launched in June 2023 to bridge traditional payment systems with blockchain technology, the trial facilitated a live transaction. In this transaction, a CBDC owner was able to directly purchase a nonfungible token (NFT) listed on Ethereum. The process involved “locking” a predetermined amount of the CBDC on the RBA’s platform and subsequently minting an equivalent amount of wrapped CBDC tokens on Ethereum.
The trial also showcased the platform’s ability to implement controls on public blockchains. Specifically, the Ethereum wallets involved in the transaction, as well as the smart contract governing the NFT marketplace, were placed on an “allow list.” Richard Wormald, Mastercard’s Australasia Division President, commented on the trial’s significance, stating:
By enabling people to easily move digital currencies on-demand, via Mastercard’s trusted network, more consumers could participate in crypto ecosystems using reputable and reliable forms of money, while enjoying the benefits that these currencies offer such as programmability, transparency, and compliance.
Collin Brown, a blockchain researcher and XRP proponent, also tweeted about the development while also hinting at a potential partnership between Mastercard and Ripple’s XRP. However, there have been no confirmed reports to validate this claim.
The Reserve Bank of Australia has previously indicated its interest in the potential advantages of an Australian dollar CBDC. The central bank believes that such an innovation could revolutionize complex payment systems. However, the RBA also stressed the need for additional research to fully assess the benefits and implications of implementing a CBDC.
Amidst this backdrop, Mastercard recently terminated its alliance with Binance, a leading cryptocurrency exchange. This move affected crypto card programs in several countries, including Argentina, Brazil, Colombia, and Bahrain. Although the exact reason for this decision remains undisclosed, speculation suggests it may be related to regulatory challenges Binance is facing in the United States.
Earlier this year, Mastercard also announced the Crypto Credential service, designed to ensure verifiable and compliant transactions between users’ digital wallets. This service allowed for compliance with the Financial Action Task Force’s “travel rule,” which mandates the exchange of personally identifiable information for crypto transactions exceeding $1,000.
