Mastercard creates CBDC testing platform for all financial institutions

World leader in payments, Mastercard, has unveiled a brand new testing structure for CBDCs across the globe. With hordes of financial institutions looking to develop digital or cryptocurrencies, Mastercard’s platform may prove to be a great environment to assess various cases of CBDCs in action.

This platform is essentially going to be a simulation, which will issue, distribute, and exchange CBDCs between banks (central and commercial), insurance companies, fintech firms, and ordinary consumers. Buoyed by the mass wave of Central Banks experimenting with their own digital currency, Mastercard has built this platform as a testing ground.

Specifically, Mastercard’s tool would strengthen its ties with Central Banks around the globe, and make it indispensable. Ultimately, the aim of developing the platform is to ensure that Mastercard is a core part of global transactions, even if they involve digital currency.

Commenting on the new development, Mastercard Blockchain services Exec Raj Dhamodharan said, “Central banks have accelerated their exploration of digital currencies with a variety of objectives, from fostering financial inclusion to modernizing the payments ecosystem. This new platform supports central banks as they make decisions now and in the future about the path forward for local and regional economies.”

From an operational perspective, the Mastercard platform will help CBDC developers to understand the need and feasibility of the new currencies in their regions or countries. Notably, It will experiment with the use of CBDCs in real-time payments or card-based transactions. Importantly, it will highlight Mastercard’s global presence in the industry. Finally, it would also check the security and technical build of the CBDC model.