The experiment revealed that CBDCs may be wrapped and used to buy NFTs on blockchains like Ethereum. Wrapping central bank digital currencies (CBDCs) on separate blockchains, analogous to wrapped Bitcoin (wBTC) and wrapped Ether (wETH), has been done by Mastercard.
According to the Oct. 12 release, the study was carried out in collaboration with the Reserve Bank of Australia (RBA) and the country’s Digital Finance Cooperative Research Centre CBDC, as well as Cuscal and Mintable. In a real scenario, Mastercard stated that the solution enabled a CBDC owner to purchase a nonfungible token (NFT) listed on Ethereum.
“The process ‘locked’ the required amount of a pilot CBDC on the RBA’s pilot CBDC platform and minted an equivalent amount of wrapped pilot CBDC tokens on Ethereum,” the payment processor said in a statement. “A prerequisite for the test transaction was that both the buyer’s and seller’s Ethereum wallets, as well as the NFT marketplace smart contract, were ‘allow-listed’ on the platform.” All additional transfers of the wrapped pilot CBDC were prohibited, demonstrating the platform’s ability to establish controls – even on public blockchains.”
The solution makes use of Mastercard’s Multi Token Network, which was launched in June 2023 and integrates payment technology with blockchains.
“Together with Mastercard, we have identified a use case whereby digital currencies and NFTs can easily be linked, potentially stamping out fraud and theft, ending the loss of documentation and records, and unleashing new possibilities for commerce,” said Zack Burcks, founder and chief executive officer of Mintable The RBA previously indicated that an Australian dollar CBDC might enable complicated payment arrangements and financial sector innovation that fiat money cannot replace. However, the central bank stated that “more research” is needed to assess the benefits.