Mastercard has launched the CBDC Partner Program with the objective of bringing together Central Banks and crypto ventures all over the world. The idea is to learn from each other and help accelerate the development and adoption of digital tokens. The news has been confirmed by Michael Miebach, the Chief Executive Officer of Mastercard.
Mastercard will now help Central Banks in conducting research so that there is a well-established understanding of the technology. Moreover, it will help them maintain consumer privacy and transparency. While stability is often a sidelined aspect of CBDC, Mastercard will make sure that every partner involved in the project sheds their view on it for greater progress.
Ventures participating in the CBDC Partner Program hail from sectors like payments, blockchain, and Web3. Some of them are Ripple, Consult Hyperion, Consensys, Fireblocks, and Idemia Group.
CBDC, short for Central Bank Digital Currencies, is gaining momentum. They are backed by Central Banks and offer better stability to holders as compared to other cryptocurrencies. Meaning that volatility plays very little role in the digital currency issued by their respective Central Banks. They are backed by fiat currencies, often in the ratio of 1:1.
Mastercard has said in the official announcement that almost 93% of the Central Banks across the world are working to launch digital currencies. If not launched, then they are engaged in some other similar activity pertaining to digital currency. A report by the Bank for International Settlements has revealed that four CBDCs are in full circulation.
There is a need for the CBDC Partner Program to learn about the safer implementation of the technology.
Raj Dhamodharan from Mastercard has said that the research will help them drive efficiencies and innovation. The Head of Digital Assets & Blockchain has also stated that the program has been designed in such a way that it fosters collaboration with the key players in the segment. He has talked about the beliefs of Mastercard, saying that there must be payment and interoperability choices for users at the time of executing a transaction for payments.
Sebastian Baierle from G+D, one of the partners of the program, has said that the intentions of introducing CBDC or digital tokens may vary from one country to another. The fact can still not be ignored that there is a rising demand from people to have digital currency along with cash, which is not going anywhere despite the association.
The statement comes on the grounds of the partnership between G+D and the Bank of Ghana. They want to launch a CBDC pilot so that more citizens become a part of the formal financial ecosystem. The Swedish Central Bank, on the other hand, is concerned that the introduction of digital currencies may cause a dramatic shift to something that is backed by their Central Bank. Hence, no intent to preserve.