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September 09, 2020, 11:36:49 PM |
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Mastercard announced this Wednesday, August 9, a virtual test environment, which will allow central banks to evaluate the use cases of central bank cryptocurrencies (CBDC). The platform, Mastercard notes, enables the simulation of CBDC issuance, distribution and exchange between banks, financial service providers and consumers.
In addition to inviting central banks to test the platform, Mastercard notes that it can be useful for commercial banks and financial and technology consultants. It invites these instances "to evaluate CBDC technology designs, validate use cases, and evaluate interoperability with the payment mechanisms that are available today to consumers and organizations."
Central banks have accelerated their exploration of digital currencies with various goals, from driving digital inclusion to modernizing the payments ecosystem. […] This new platform supports central banks in making decisions, now and in the future, on the way forward for local and regional economies.
CBDCs are designed, Mastercard notes, to be equivalent in value to national currencies, and are subject to the same guarantees to back them up. Among the various operating models for CBDC, the most widely used approach is issuance and distribution through commercial banks.
Among the characteristics of the announced platform, the main one is to simulate the issuance of CBDC, its distribution and exchange with banks and consumers. It also defines how CBDC can interact with existing payment networks and infrastructures, Mastercard says.
On the other hand, the proposed platform allows to show how a consumer can use a CBDC to pay for goods and services wherever Mastercard is accepted. The market viability of various designs and use cases of a CBDC can be evaluated with this platform.
80% of central banks that participated in a survey conducted by the Bank for International Settlements, are involved in some type of work with CBDC. 40% of central banks have gone from the conceptual research stage to experimenting with designs, according to the query.
CBDCs could accelerate a transformation of the global financial system. That possibility arose from Facebook's proposal for Libra, a cryptocurrency that would be independent of any national jurisdiction and to which the almost 3 billion users who access Facebook on a monthly basis would have access. In this Mastercard proposal, the use of CBDC in different jurisdictions is also considered
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