- The primary objective of this project was to explore the potential use cases for a CBDC in Australia
- The solution ensures that the pilot CBDC can only be held, used, and redeemed by authorized parties.
Mastercard announced on 12 October that it has found a solution to enable the tokenization or “wrapping” of Central Bank Digital Currencies [CBDCs] across various blockchains.
The technology helps to bolster security and also allows consumers to participate in commerce across multiple blockchains.
It was part of the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre’s (DFCRC) central bank digital currency pilot project. The primary objective of this project was to explore the potential use cases for a CBDC in Australia.
One of the critical aspects of this new solution is its emphasis on security. In this joint effort, Mastercard ensured that only authorized parties could hold, utilize, and redeem the pilot CBDC. This measure aims to safeguard the integrity and legitimacy of CBDC transactions.
As the digital economy continues to evolve, there is a growing demand from consumers to participate in commerce across multiple blockchains, including public ones. This technology enables collaborations between public and private networks within the digital currency realm.
A new era for digital currency transactions across blockchains?
To demonstrate the capabilities of this solution, Mastercard conducted a live transaction. In this scenario, the holder of a pilot CBDC used it to purchase a Non-Fungible Token [NFT] listed on the Ethereum [ETH] public blockchain.
The process involved “locking” the required amount of the pilot CBDC on the RBA’s pilot CBDC platform. The next step was minting an equivalent amount of wrapped pilot CBDC tokens on the Ethereum blockchain.
A crucial prerequisite for the test transaction involved the “allow-listing” of Ethereum wallets belonging to both the buyer and seller. Another one is the NFT marketplace’s smart contract within the platform. This demonstrated the platform’s ability to impose controls effectively, even on public blockchains.
This innovative development in the world of CBDCs and blockchain technology has far-reaching potential. It could enhance interoperability between blockchains safely and securely.
The ability to move digital currencies across different blockchains via Mastercard’s network opens up opportunities to participate in crypto ecosystems using reputable and reliable forms of money.
