Mastercard looks to improve blockchain interoperability with its Multi-Token Network
|Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here!|
(Kitco News) - Global payments processor Mastercard continues to be one of the most active companies in the adoption of blockchain technology as the firm has announced the launch of the Mastercard Multi-Token Network (MTN), a solution designed to support interoperability within the blockchain ecosystem.
“Our vision for MTN is to provide a set of foundational capabilities designed to make transactions within the digital asset and blockchain ecosystems secure, scalable and interoperable – ultimately enabling more efficient payment and commerce applications,” Raj Dhamodharan, Executive Vice President of Digital Asset, Blockchain Products and Partnerships at Mastercard said in the announcement.
According to Dhamodharan, the MTN is built on “four pillars of trust” that aim to meet key needs in the digital asset industry: trust in counterparty, trust in digital payment asset, trust in technology, and trust in consumer protections.
On the topic of counterparty trust, Dhamodharan said, “Effective identity management and permissions are essential to building trusted networks.“ To address this pillar, “MTN will leverage Mastercard Crypto Credential to offer a set of common verification standards and infrastructure, in turn enabling trusted interactions among consumers and businesses using blockchain networks.”
He noted that the company's recent work on the Australian central bank digital currency (CBDC) pilot uses the same technology to secure transactions, and several of Mastercard’s partners are already working with the firm to enable transfers on public chains.
For trust in digital payment assets, Dhamodharan highlighted Mastercard’s efforts in testing the use of tokenized commercial bank deposits between several financial institutions, which were settled through Mastercard’s existing network. “MTN will support and complement these efforts by enabling regulated payment tokens to power financial applications,” he said.
Regarding trust in technology, Dhamodharan said “Scalability of blockchain networks and interoperability among them are critical technologies required for safe transfers of tokens and assets.”
“Our work with the Reserve Bank of Australia (RBA), in partnership with Cuscal Payments and Mintable on its CBDC pilot, demonstrates how CBDCs issued by the RBA could be used to make seamless purchases of assets from allow-listed entities on the public blockchain,” he said. “MTN aims to offer these capabilities across all supported payment tokens and networks in a scalable manner.”
And to address trust in consumer protections, the MTN “will draw on [Mastercard’s] years of experience developing standards and rules for our card network to provide a common framework for a community of users with shared interests,” Dhamodharan said. “This includes clear rules of the road that prioritize strong consumer protections, stability and regulatory compliance.”
A beta version of MTN will be released in the UK this summer to serve as a testbed for developing live pilot applications and use cases with financial institutions, fintechs and central banks. The first phase of testing will focus on tokenized bank deposits, and Mastercard plans to make the platform available to additional markets around the world over time.
“We believe that digital asset and blockchain technologies [will] one day become critical infrastructure for storing and moving value,” Dhamodharan said. “In bringing the power of 24/7 operations, programmability and immutability to all aspects of the economy, blockchain capabilities and tokenization can reach their full potential, delivering true transformation. Our goal [with MTN] is to support the wider digital asset industry and interested parties to help fortify confidence in its future.”
|SWIFT collaborates with Chainlink to explore blockchain interoperability|
Along with its efforts in the blockchain-based payments arena, which includes the launches of ‘Crypto Secure’ and ‘Crypto Source’ in October, Mastercard also has a six-month fintech accelerator program that is designed to assist startups with the expansion and commercialization of their products and services.
The company also participated in the New York Fed’s 12-week pilot project in collaboration with commercial banks to explore the creation of a digital dollar.
And in January, Mastercard partnered with the layer-two blockchain platform Polygon to launch its Web3-based Mastercard Artist Accelerator program, which is designed to help “connect artists from around the world with notable mentors and a dynamic fanbase as they learn and create in Web3.” To celebrate the platform's launch, the payment provider released its limited edition Mastercard Music Pass non-fungible token (NFT) in April, which the company said “is key to unlocking” the accelerator platform.