Mastercard has launched a new partnership program designed to explore the benefits and limitations of central bank digital currencies.
The collaboration will see seven prominent crypto and FinTech firms join forces, including Ripple and Consensys, as the organisation investigates how a CBDC works with other commonly used payment mechanisms, what specific challenges they would solve and whether they’re even the right tool for the job.
Raj Dhamodharan, head, digital assets and blockchain, Mastercard, says: “We believe in payment choice and that interoperability across the different ways of making payments is an essential component of a flourishing economy,
“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.”
The global payment processing corporation claimed that there are plenty of issues for the new partnership to explore as the technology continues to mature. “For one thing, CBDCs have yet to gain wide acceptance,” they wrote. “While BIS expects as many as 24 central bank digital currencies to be circulating by decade’s end, more than two-thirds of central banks say they’re unlikely, in the near term, to issue a digital currency people can use for everyday purchases.”
Mastercard’s efforts to delve further into the issue are set to include Fluency’s work to build interoperability among different CBDCs, Consult Hyperion’s work with central banks and payment processors to define their CBDC requirements and Ripple’s launch of an inaugural government-issued national stablecoin in collaboration with the Republic of Palau.
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