Mastercard will launch pilot trials of the Multi-Token Network (MTN). As part of the initiative, the payments giant will experiment with tokenized bank deposits.
MTN will be available in beta this summer in the UK. A number of banks and financial institutions have been invited to participate.
As part of the innovation sprint, selected teams will have access to MTN capabilities to develop promising use cases for tokenized deposits.
Raj Damodaran, head of the company’s cryptocurrency and blockchain department, expects that over time, the initiative will also affect regulated stablecoins and CBDCs.
“Today, the global economy is driven by regulated money in banks. We start by creating tokenized bank deposits. Thus, a currency in a bank account is a digital asset in the blockchain, providing the same level of programmability as a digital currency in a crypto ecosystem,” he explained.
The first types of applications and use cases that Mastercard intends to promote with tokenized banking money are combined with the Mastercard Crypto Credentials project. The latter acts as a blockchain analytics service that guarantees compliance AML.
“Let’s say a bank in the UK has this kind of tokenized form of deposit at an institution. Suppose another bank in Singapore has the same counterpart. One can be exchanged for another, which has traditionally caused a lot of problems in terms of being able to move quickly and flexibly,” the specialist explained.
Recall that in October 2022, Mastercard announced plans to become an intermediary for traditional financial institutions in the launch of cryptocurrency trading.
In the same month, the company announced the launch of the Crypto Secure tool. It will allow banks to identify and stop transactions from crypto exchanges subject to fraudulent practices.
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