Mastercard’s new program is a great way to develop digital currencies, transforming the way users pay, aiming to make the CBDCs user-friendly like any form of fiat money.
The payment processing company is working with seven prominent crypto and FinTech firms, including Ripple and Consensys, investigating how the new program works with other used payment mechanisms, experiencing the challenges to see whether they can be solved and are the right tool for the job.
Knowing that, Mastercard is not the only company pursuing to use CBDC. But its rival Visa is also pushing its own CBDC agenda.
Mastercard can benefit from CBDC by reducing the cost of financial services, making it easier for the users to access financial services, and promoting financial presence.
A recent survey by the Bank of International Settlements (BIS) in Basel, Switzerland, revealed in 2022 that around 93% of banks are exploring the potential of CBDCs. On top of that, 60% of banks stated that stablecoins have accelerated their work on CBDCs.
However, the new program of CBDCs is associated with some risks, such as risks of cyber-attacks, risk of inflation, and the potential for increased government examinations.
“Given our relationships with central banks around the world, our hope is to better connect them with these players and unlock ways to work with other commonly used payment mechanisms in a safe, seamless and useful way,” said Raj Dhamodharan. He is the Executive Vice President (EVP) of Blockchain/Digital Asset Products & Partnerships at Mastercard.
The CBDC program has the potential to impact transactions and the way the world will effectively connect with digital currencies.
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