Mastercard has announced the successful demonstration of a central bank digital currency (CBDC) technology designed to integrate CBDCs with multiple blockchain networks, according to a press release.
The technology aims to facilitate the tokenization, or ‘wrapping’, of CBDCs on various blockchain networks to improve consumer convenience and transaction security.
Australian CBDC pilot
Mastercard’s new solution was developed in collaboration with Cuscal and Mintable. It was tested at the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Center (DFCRC) as part of their experimental CBDC project.
The RBA’s pilot project with the DFCRC aimed to explore the diverse applications of a CBDC in Australia by exploring new payment and settlement solutions for households and businesses in the country.
A demonstration from Mastercard highlighted a CBDC holder making a purchase of a non-fungible token (NFT) on Ethereum’s public blockchain. The system ensured that a specific CBDC amount was ‘locked’ on the RBA’s platform and then minted an equivalent number of wrapped CBDC tokens on Ethereum – demonstrating interoperability between different blockchains.
Additionally, the platform can enforce transaction control on public blockchain networks by restricting the wrapped CBDC so that it can only be sent to pre-approved Ethereum wallets that are on the ‘allow list’.
Multi-token network
The technology is part of Mastercard’s Multi Token Network initiative, launching in 2023.
Mastercard’s Multi Token Network – currently in beta testing – is part of the company’s strategy to integrate blockchain technology into various payment scenarios.
The network aims to improve blockchain-based payment and commerce solutions. It includes a Crypto Credential feature to facilitate trust in blockchain interactions and scalable interoperability across different tokens and networks.
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