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September 10, 2020

Mastercard Launches Central Bank Digital Currencies (CBDCs) Testing Platform, Enabling Central Banks to Assess and Explore National Digital Currencies.

The innovative virtual and custom testing platform allows central banks to evaluate use cases and test roll-out strategies for CBDCs by simulating a CBDC ecosystem.

Central banks, commercial banks, and tech and advisory firms are invited to partner with Mastercard to evaluate the suitability of CBDCs in a country or region.


Photo: Mastercard Launches Central Bank Digital Currencies (CBDCs) Testing Platform.

Purchase, NY | September 9, 2020 — With the global economy racing to embrace digital payments, central banks also are looking to the future and investigating how to support innovation while maintaining monetary policy and financial stability as they issue and distribute currency. According to a recent survey by the Bank for International Settlements, 80 percent of central banks surveyed engage in Central Bank Digital Currencies (CBDCs) work. About 40 percent of central banks have progressed from conceptual research to experimenting with concept and design.

Today, Mastercard announced a proprietary virtual testing environment for central banks to evaluate CBDC use cases. The platform enables the simulation of issuance, distribution, and exchange of CBDCs between banks, financial service providers, and consumers. Mastercard invites Central banks, commercial banks, and tech and advisory firms to partner with it to assess CBDC tech designs, validate use cases and evaluate interoperability with existing payment rails available for consumers and businesses today.

Mastercard says that it is a leader in operating multiple payment rails and convening partners to ensure a level playing field for everyone - from banks to businesses to mobile network operators - to bring the most people into the digital economy. Mastercard said it wants to harness its expertise to enable the practical, safe, and secure digital currencies development.

“Central banks have accelerated their exploration of digital currencies with a variety of objectives, from fostering financial inclusion to modernizing the payments ecosystem,” said Raj Dhamodharan, Executive Vice President, Digital Asset, and Blockchain Products and Partnerships, Mastercard. “Mastercard is driving innovation with the public sector, banks, fintech, and advisory firms in the exploration of CBDCs, working with partners that are aligned to our core values and principles. This new platform supports central banks as they make decisions now and in the future about the path forward for local and regional economies,” Dhamodharan added.

Mastercard explained that CBDCs are equivalent in value to a nation’s paper currency and subject to the same government-backed guarantees. In addition to printing money, central banks can issue CBDCs as a digital representation of a country’s fiat currency.

Driving Scalable Innovation

While various potential operating models exist, the primary approach sees central banks issuing and distributing currency, including digital currencies, through commercial banks and other licensed payment providers. Mastercard said it understands every central bank differs in its exploration of CBDCs, and the platform stands ready to explore whether CBDCs fit with the needs of a region or country. The virtual platform can be individually customized to the central bank’s environment, allowing them to:

Central Bank Digital Currencies of the Future

“Mastercard is committed to supporting central banks in their chosen path to modernize payments as they look for solutions that seamlessly integrate with existing ways to pay. The company is committed to forging partnerships between public and private sectors to transform the way people and businesses transact,” Mastercard concluded.

Source: Mastercard

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Edited & Posted by the Editor | 4:58 AM | Link to this Post

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