Mastercard, in collaboration with the Reserve Bank of Australia (RBA) and the country’s Digital Finance Cooperative Research Centre CBDC, has achieved remarkable success in wrapped CBDC trial on various blockchains.
This innovative approach, akin to wrapped Bitcoin (wBTC) and wrapped Ether (wETH), demonstrated the feasibility of using CBDCs to purchase nonfungible tokens (NFTs) on blockchains like Ethereum.
Trial Overview and The Wrapping Process
In an announcement on October 12, Mastercard disclosed that the trial showcased the seamless process of wrapping CBDCs for real-world transactions. The Reserve Bank of Australia (RBA), Cuscal, and Mintable actively participated in this experiment. During the live trial, a CBDC owner successfully acquired an NFT listed on Ethereum by leveraging Mastercard’s solution.
The process involved “locking” the required amount of a pilot CBDC on the RBA’s CBDC platform. This is followed by minting an equivalent amount of wrapped pilot CBDC tokens on the Ethereum blockchain. An essential aspect of the test transaction was the “allow-listing” of Ethereum wallets for both the buyer and seller, along with the NFT marketplace smart contract.
This precautionary measure ensured the controlled transfer of wrapped pilot CBDC tokens. Further, it highlights the platform’s ability to implement security controls, even on public blockchains.
Mastercard’s Multi Token Network
This successful trial was made possible through the utilization of Mastercard’s Multi Token Network, introduced in June 2023. This innovative network seamlessly integrates payment technology with blockchains, offering a robust solution for linking digital currencies and NFTs. Zack Burcks, CEO and founder of Mintable, expressed optimism about the collaboration, stating,
“Together with Mastercard, we have identified a use case whereby digital currencies and NFTs can easily be linked, potentially stamping out fraud and theft, ending the loss of documentation and records, and unleashing new possibilities for commerce.”
Implications for the Future
The Reserve Bank of Australia (RBA) has previously highlighted the potential of an Australian dollar CBDC in enabling complex payment arrangements and fostering innovation in the finance sector. While acknowledging the benefits, the central bank also emphasized the need for “more research.” This is to fully evaluate the implications and advantages of CBDCs in the evolving landscape of digital finance.