CBDCs Lacking Justification, Says Mastercard

Global payments firm Mastercard has commented on the slow adoption of central bank digital currencies (CBDCs). During the Singapore FinTech Festival, Ashok Venkateshwaran, Mastercard’s lead for blockchain and digital assets in Asia-Pacific, expressed skepticism about the immediate need for CBDCs given the comfort customers have with existing monetary systems. Venkateshwaran emphasized the challenges of adopting CBDCs, noting the importance of their usability across various platforms, akin to cash.

What you need to know

• Mastercard’s blockchain and digital assets lead for Asia-Pacific, Ashok Venkateshwaran, expresses skepticism about the rapid adoption of CBDCs, citing customer comfort with current money systems.
• The company’s CBDC Partner Program involves key industry entities like Ripple, Fireblocks, and Consensys, aiming to enhance discussions around CBDC development.
• Mastercard recently conducted a CBDC pilot in Hong Kong, showcasing the potential for CBDCs in real-world asset transactions and integration into Web3 marketplaces.

Despite a cautious and critical stance, Mastercard is nevertheless participating in the CBDC conversation. The company’s CBDC Partner Program, featuring key industry players like Ripple, Fireblocks, and Consensys, aims to foster dialogue and collaboration in the CBDC space. This initiative reflects Mastercard’s deepening involvement in the evolving landscape of digital currencies, particularly as an increasing number of countries explore CBDCs. According to the Atlantic Council, around 130 countries, making up 98% of the global GDP, are now examining the potential of CBDCs, a significant jump from just 35 countries in May 2020.

However, Venkateshwaran pointed out the considerable effort and time required to build the necessary infrastructure for CBDCs. Mastercard recently concluded a CBDC pilot in Hong Kong, demonstrating the use of digital currencies in real-world asset transactions and their potential integration into Web3 marketplaces. This pilot highlighted how CBDCs can streamline processes for funding and settlement.