Mastercard launches Central Bank Digital Currencies Testing Platform

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Sep 11, 2020 (LBO) – Mastercard has announced a proprietary virtual testing environment for central banks to evaluate Central Bank Digital Currencies (CBDCs) use cases.

The platform enables the simulation of issuance, distribution, and exchange of CBDCs between banks, financial service providers, and consumers.

“Central banks, commercial banks, and tech and advisory firms are invited to partner with Mastercard to assess CBDC tech designs, validate use cases and evaluate interoperability with existing payment rails available for consumers and businesses today,” Mastercard said in a statement.

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.

“In fact, 80 percent of central banks surveyed are engaging in some form of Central Bank Digital Currencies (CBDCs) work, and about 40 percent of central banks have progressed from conceptual research to experimenting with concept and design, according to a recent survey by the Bank for International Settlements.”

Driving Scalable Innovation

While a variety of potential operating models exist, the primary approach sees central banks issuing and distributing currency, including digital currencies, through commercial banks and other licensed payments providers. Mastercard 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 environment in which the central bank operates, allowing them to:

  • Simulate a CBDC issuance, distribution and exchange ecosystem with banks and consumers, including how a CBDC can interface with existing payment networks and infrastructures – e.g., cards and real time payments.
  • Demonstrate how a CBDC can be used by a consumer to pay for goods and services anywhere Mastercard is accepted around the world.
  • Examine various CBDC technology designs and use cases to more quickly determine value and feasibility in a market.
  • Evaluate CBDC development efforts including the technical build, security and early testing of the design and operations.