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By RTTNews Staff Writer | Published: 9/10/2020 10:14 AM ET
Payment solutions giant MasterCard, Inc. has launched a virtual and custom testing platform to help assess and explore issuance of Central Bank Digital Currencies (CBDCs). The platform will enable Central Banks across the world to evaluate use cases and test roll-out strategies for CBDCs by simulating a CBDC ecosystem.
CBDCs are slated to be the digital equivalent in value to a nation's paper currency and are subject to the same government-backed guarantees. In addition to printing money, central banks can issue CBDCs as a digital representation of a country's fiat currency.
CBDCs are expected to be used for interbank settlements. However, this collaboration between public and private sectors can help central banks better understand the range of technology possibilities and capabilities available with respect to CBDCs.
Mastercard said every central bank differs in its exploration of CBDCs, and the platform stands ready to explore whether CBDCs fit with the needs of a region or country. The virtual platform can also be individually customized to the environment in which the central bank operates.
Mastercard's proprietary virtual testing environment for central banks to evaluate CBDC use cases will enable the simulation of issuance, distribution and exchange of CBDCs between banks, financial service providers and consumers.
Central banks, commercial banks, and tech and advisory firms can partner with Mastercard to assess CBDC tech designs, validate use cases and evaluate interoperability with existing payment rails available for consumers and businesses as of now.
While the global economy racing to embrace digital payments, central banks also are looking to investigate and support innovation while maintaining monetary policy and financial stability as they issue and distribute currency.
According to a recent survey by the Bank for International Settlements (BIS), about 80 percent of central banks surveyed are engaged in some form of work to develop CBDCs, and about 40 percent of central banks have progressed from conceptual research to experimenting with concept and design for CBDCs. Central banks representing a fifth of the world's population say they are likely to issue the first CBDCs in the next few year.
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Article written by an RTT News Staff Writer, and posted on the RTT News.com website.
Article reposted on Markethive by Jeffrey Sloe
