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  • Writer's pictureT Skevington and M Bacina

Mastercard minting digital currencies for central banks?

Updated: May 2

Mastercard has announced the release of a proprietary testing environment which gives central banks the tools to simulation the issuance, distribution and exchange of Central Bank Digital Currencies (CBDCs).

Mastercard is clearly keen to hedge its bets should a CBDC become a dominant payment method, with one explicit use case of the testing platform being to explore and demonstrate:

how a CBDC can be used by a consumer to pay for goods and services anywhere Mastercard is accepted around the world.

This latest release comes as CBDC development accelerates during COVID-19, a reality which was acknowledged by Raj Dhamodharan, Executive Vice President, Digital Asset and Blockchain Products and Partnerships, Mastercard:

Central banks have accelerated their exploration of digital currencies with a variety of objectives, from fostering financial inclusion to modernizing the payments ecosystem

Speaking on the release generally, Mastercard said:

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 together transform the way people and businesses transact.

This latest release comes a few months after Mastercard's expansion of its Accelerate program to include digital currency integrations, and its partnership with London-based crypto payment processor Wirex.

Mastercard's involvement and interest in cryptocurrency appears to have only accelerated since it's initial involvement in (and subsequent abandonment of) the Libra Association. Whether this continues into the future remains to be seen, but the BIS clearly thinks these developments are here to stay.


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