Global payment service provider Mastercard has launched a virtual testing platform that will enable banks around the world to explore the uses and efficacy of central bank digital currencies.
According to the release on BusinessWire, Mastercard has opened up its virtual and customizable testing platform that will allow central banks to explore use cases and test possible roll-out scenarios for CBDCs.
The platform will allow users to simulate a CBDC ecosystem and test the various capabilities of the system. Mastercard has called for central and commercial banks as well as technology firms to use the platform to evaluate the potential use of CBDCs in different countries and regions.
Customizable for different regions and use-cases
Mastercard is cognizant of the fact that there are a number of different ways in which a CBDC can be developed, issued and used but has identified and developed a primary approach as set out in its release.
This would see a central bank being responsible for the actual issuance and distribution of a digital currency which would move through commercial banks and licensed payment service providers.
Nevertheless different banks and financial organizations will differ in their thoughts and approaches towards CBDCs and Mastercard has made the platform customizable to its users.
Using the platform, users can simulate the issuance of a CBDC and its distribution and exchange within an environment consisting of banks and consumers. This will also encapsulate how a CBDC can interface with different payment networks, from card to mobile payment services.
The system will also allow banks to understand how consumers can use a CBDC to pay for goods and services around the world, using Mastercard’s existing network across the world.
The platform will also allow users to evaluate the technical capabilities of a CBDC ecosystem as well as the security, design and operation of the platform.
Another step forward in the CBDC race
The development and provision of a platform backed by one of the world’s biggest payment service providers is another big step in the ongoing development of CBDCs. Countries like China may be ahead of the pack in the development of a CBDC, but the development of a trusted proprietary platform may open the door for other countries and regions to expedite the launch of their own CBDCs.
A recent survey from the Bank for International Settlements shows that 80 percent of central banks involved in the study indicated that they’re exploring CBDCs in one way or another, while 40 percent of participating central banks have moved from conceptual research to tinkering with concepts and designs of inhouse CBDCs.