Central banks are willing to learn more about cryptocurrencies. According to the Bank of International Settlements, more than 70% of central banks are exploring the idea of digital currency in some form. People should take into account that, only several central banks moved into actual concept and experimentation.
Central banks around the world should pay more attention to this topic. However, it is no easy task. Hopefully, Mastercard released a proprietary tool targeted to central banks that would like to test their Central Bank Digital Currency or CBDC. Thanks to this tool it will be easier to test CBDC.
American multinational financial services corporation developed a tool that simulates various types of transaction environments to let central banks evaluate CBDC use cases. This is not the end of the story, as it mimics the issuance, distribution, and exchange of CBDC’s between banks. This tool also covers financial services companies as well as consumers.
Mastercard and digital currencies
Notably, Mastercard called its partners to use the platform to evaluate the effectiveness of CBDC’s technological designs. Moreover, they can also evaluate the proposed use cases and interoperability with existing payment methods.
Interestingly, one of the possibilities of a virtual sandbox is directly connected to Mastercard. Notably, the virtual sandbox can demonstrate how a consumer can use CBDC to pay for goods and services anywhere Mastercard is accepted around the world.
Central Bank Digital Currencies is a step forward as digital currencies allow central banks a direct bridge to consumers. Thus, central banks will be able to avoid commercial banks when it comes to distributing and collecting money. Nevertheless, some designs focus only on institutional money transfers. Notably, the platform developed by American multinational financial services corporation covers both of them.
Last but not least, Mastercard works actively with various types of distributed ledger technology. In 2019, Mastercard joined the Libra consortium. Nevertheless, the American financial services corporation left the association due to regulatory headwinds.
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