MasterCard partners with Qatar Development Bank to support Qatar Fintech Hub
With the global economy racing to embrace digital payments, central banks also are looking to the future and investigating how to support innovation while maintaining monetary policy and financial stability as they issue and distribute currency. In fact, 80 percent of central banks surveyed are engaging in some form of Central Bank Digital Currencies (CBDCs) work, and about 40 percent of central banks have progressed from conceptual research to experimenting with concept and design, according to a recent survey by the Bank for International Settlements.
As such Mastercard has announced a proprietary virtual testing environment for central banks to evaluate CBDC use cases. The platform enables the simulation of issuance, distribution and exchange of CBDCs between banks, financial service providers and consumers. Central banks, commercial banks, and tech and advisory firms are invited to partner with Mastercard to assess CBDC tech designs, validate use cases and evaluate interoperability with existing payment rails available for consumers and businesses today.
According to the press release, Mastercard wants to harness its expertise to enable the practical, safe and secure development of digital currencies.
“Central banks have accelerated their exploration of digital currencies with a variety of objectives, from fostering financial inclusion to modernizing the payments ecosystem,” said Raj Dhamodharan, Executive Vice President, Digital Asset and Blockchain Products and Partnerships, Mastercard. “Mastercard is driving innovation with the public sector, banks, fintechs, and advisory firms in the exploration of CBDCs, working with partners that are aligned to our core values and principles. This new platform supports central banks as they make decisions now and in the future about the path forward for local and regional economies,” Dhamodharan added.
Sheila Warren, Head of Blockchain, Digital Assets and Data Policy at the World Economic Forum, said: “Collaborations between the public and private sectors in the exploration of Central Bank Digital Currencies can help central banks better understand the range of technology possibilities and capabilities available with respect to CBDCs. Central banks can benefit from support in exploring the option set available to them with respect to CBDCs, as well as gaining insight into what opportunities may be forthcoming.”
CBDCs are designed to be equivalent in value to a nation’s paper currency and subject to the same government-backed guarantees. In addition to printing money, central banks can issue CBDCs as a digital representation of a country’s fiat currency.
The virtual platform can be individually customized to the environment in which the central bank operates, allowing them to, simulate a CBDC issuance, distribution and exchange ecosystem with banks and consumers, including how a CBDC can interface with existing payment networks and infrastructures – e.g., cards and real time payments, Demonstrate how a CBDC can be used by a consumer to pay for goods and services anywhere Mastercard is accepted around the world, examine various CBDC technology designs and use cases to more quickly determine value and feasibility in a market and Evaluate CBDC development efforts including the technical build, security and early testing of the design and operations.
Recently MasterCard , As part of its efforts to drive innovation, technology leader Mastercard has partnered with Qatar Development Bank (QDB) to support the development of the fintech industry through the Qatar FinTech Hub (QFTH) – a tech ecosystem that supports the growth of local and international fintech companies in Qatar. MasterCard will help to drive digital payments ecosystem in Qatar.