Mastercard Partners with Ripple, Consensys, and Others to Research CBDCs

Mastercard has announced a new project that brings together top blockchain technology and payment service providers to explore the potential benefits and challenges of central bank digital currencies (CBDCs) and how to implement them safely and effectively.

In its announcement, Mastercard cited the Bank for International Settlements report that multiple central banks globally are actively engaged in CBDC projects. According to the company, stakeholders in the financial industry must try to understand the multifaceted nature of CBDC technology.

The CBDC Partner Program will address questions about how the private sector can help with CBDC issuance, security, privacy, and interoperability challenges. This includes figuring out how CBDCs can be used with existing payment methods and when they’re appropriate to use in different situations.

Raj Dhamodharan, Mastercard’s head of digital assets and blockchain, noted that the program is designed to facilitate collaboration with key players in the space so they can drive innovation and efficiencies.

The program boasts a roster of leading companies in the blockchain and crypto sector, including Ripple, Consensys, and Consult Hyperion. Other partners in the program include Fluency, Idemia, Giesecke+Devrient, and Fireblocks.

Ripple’s involvement in the program is not a surprise as it has been actively involved in the CBDCs space. Notably, the blockchain company has been working with the central banks of Colombia and Montenegro to investigate the possibility of creating a CBDC for their countries.

In July 2023, Ripple partnered with the Republic of Palau to launch a small-scale trial of a stablecoin which also doubles as a CBDC, the Palau Stablecoin (PSC). Palau’s financial authorities will oversee the issuance and management of the PSC using Ripple’s specialized CBDC Platform.

Dhamodharan described Mastercard’s collaboration with industry leaders to study the potential impact of CBDCs on the financial landscape, saying:

“We believe in payment choice and that interoperability across the different ways of making payments is an essential component of a flourishing economy. As we look ahead toward a digitally driven future, it will be essential that the value held as a CBDC is as easy to use as other forms of money.”