Benzinga - Corporates continue to embrace central bank digital currencies, or CBDCs, despite certain politicos calling the emerging tech "evil" and likening it to "the Death Star."
What Happened: Mastercard (NYSE: MA) recently unveiled its CBDC Partner Program, which counts Ripple (CRYPTO: XRP) and Consensys among its key participants.
Fluency, Idemia, Consult Hyperion, Fireblocks and Giesecke+Devrient, a firm based in Germany that offers a CBDC solution, are also partnering with Mastercard on the initiative.
Raj Dhamodharan, head of digital assets at Mastercard, emphasized the importance of payment interoperability.
“We believe in payment choice and that interoperability across the different ways of making payments is an essential component of a flourishing economy,” Dhamodharan said in a prepared statement. “As we look ahead toward a digitally driven future, it will be essential that the value held as a CBDC is as easy to use as other forms of money.”
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Why It Matters: As digital counterparts to government-backed fiat currencies, CBDCs have seen growing interest globally.
Last year, Consensys started working with Mastercard's rival, Visa Inc (NYSE: V), on CBDC and stablecoin projects. And the Bank for International Settlements reports that 93% of central banks have begun exploring CBDC possibilities.
The Bank of Ghana is currently partnering with G+D on its CBDC pilot, while the Bank of England collaborates with Idemia to develop fraud-prevention techniques and ensure privacy.
However, CBDC adoption faces challenges, including public unfamiliarity and recent controversies in the crypto sector, Mastercard stated.
For CBDCs to gain traction, central banks must prioritize trust-building and clear communication, it added.
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