Mastercard analysts have tested the capabilities of a tokenized central bank digital currency (CBDC) through the Multi Token Network (MTN) platform. As part of the experiment, Australian CBDC tokens were wrapped to make non-fungible token (NFT) purchases on the public Ethereum blockchain.

Mastercard Tokenizes CBDCs to Buy NFTs on Ethereum

Payment giant Mastercard, in collaboration with Australian payment service provider Cuscal and NFT marketplace Mintable, supported by the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC), has completed an experiment with issuing and using wrapped CBDC tokens. 

The experiment involved the development of a customized solution based on the functionality of the Multi Token Network (MTN) platform that allowed a digital Australian dollar (eAUD) holder to purchase NFTs hosted on the Ethereum network. The process consisted of blocking a certain amount of CBDC tokens on the RBA platform and issuing an equivalent number of wrapped eAUD tokens on Ethereum, which work similarly to wBTC, for example. 

A prerequisite for the test transaction was that the addresses of not only the buyer’s and seller’s Ethereum wallets, but also the smart contracts of the trading platform were “allow-listed.” The use of the MTN platform in this case allowed control measures to be implemented even when public blockchains were used.

According to Zack Burcks, CEO and Founder of Mintable, Mastercard’s participation in the experiment revealed certain conditions for the successful interaction of NFTs and CBDCs. Burcks believes this can help reduce fraud in the sector and potentially prevent NFT theft, as well as open up new opportunities for Web3 commerce. 

The Multi Token Network platform was launched by Mastercard in June 2023, its main purpose is to test tokenized assets. Mastercard started studying the prospects and opportunities of CBDCs together with seven blockchain companies even before the MTN was officially launched. And Australia’s CBDC experiments took place after the RBA completed a pilot project that proved the usefulness of eAUD as part of improving the efficiency of some areas of the local payments ecosystem. 

Author: Nataly Antonenko
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