July 21, 2024
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Mastercard Ventures Further into Web3 with Launch of CBDC-Focused Forum

Mastercard has extended its engagement in the Web3 realm by introducing a forum dedicated to Central Bank Digital Currencies (CBDCs). This platform serves as a space for cryptocurrency stakeholders to engage in discussions surrounding the emergence of CBDCs, which are digital counterparts of traditional fiat currencies like the dollar and rupee. CBDCs operate on blockchain technology and are being developed by numerous countries, including India, to enhance financial transparency.

Termed the “CBDC Partner Program,” this initiative seeks to foster conversations about optimizing CBDCs in terms of their utility across various use cases, as stated in an official blog post from Mastercard on August 17. Prominent crypto-related companies such as Ripple, Consensys, Fluency, Idemia, Consult Hyperion, and Fireblocks have been enlisted by Mastercard as initial members of the CBDC Partner Program.

According to Raj Dhamodharan, Mastercard’s Head of Digital Assets and Blockchain, it is crucial for people to have a range of payment options that facilitate interoperability. Dhamodharan emphasized the importance of CBDCs being user-friendly, mirroring the convenience of other forms of currency, to ensure a thriving digital economy.

Mastercard’s blog post highlighted that 93 per cent of central banks worldwide are currently involved in some form of CBDC development. Given this scenario, discussions among cryptocurrency stakeholders could assist central banks in avoiding errors and vulnerabilities.

Jesse McWaters, Head of Global Regulatory Advocacy at Mastercard, pointed out that central banks need to consider various aspects such as the role of the private sector in CBDC issuance, security, privacy, and interoperability. He highlighted the significance of addressing challenges and determining whether CBDCs are the appropriate solution.

With the CBDC Partner Program, Mastercard aims to enhance the informed deployment of CBDCs, incorporating insights from industry players. The initiative seeks to prevent disruptions in existing payment systems and potential crowding out of private sector investments resulting from poor implementation of CBDCs.

CBDCs function similarly to cryptocurrencies but are regulated and issued by central banks, making them more stable and transparent than volatile cryptocurrencies. These digital currencies offer immutable and transparent records of online transactions while also reducing reliance on physical cash.

According to a recent survey by the CFA Institute, developing markets like India and China have exhibited greater receptiveness to CBDCs. The survey highlighted that 42 per cent of global respondents favoured central banks releasing CBDCs.

Given the growing interest in CBDCs, the International Monetary Fund (IMF) has initiated work on a platform facilitating CBDC transactions between countries. The IMF aims to converge central banks on a unified regulatory framework for digital currencies to enable global interoperability. The absence of a common platform could lead to the emergence of cryptocurrencies, as noted by IMF Managing Director Kristalina Georgieva in June.

Photo by Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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