Mastercard is actively developing and piloting blockchain-based payment solutions.
The company’s recent initiatives aim to combine the flexibility of cryptocurrencies with the convenience and trust of fiat currencies and traditional banking services.
TLDR
- Mastercard is launching the Multi-Token Network (MTN), a blockchain-based platform that allows users to transact with tokenized bank deposits or central bank digital currencies (CBDCs).
- The MTN aims to bring the flexibility of cryptocurrencies together with the convenience and trust of traditional banking.
- Mastercard is piloting the MTN with various partners, enabling use cases like paying for carbon credits with tokenized deposits and automating real estate transactions.
- The company has added five new startups to its Start Path Blockchain and Digital Assets program to explore further blockchain and Web3 payment solutions.
- Mastercard is actively collaborating with banks, fintechs, and other partners to develop and test blockchain-based payment technologies and services.
At the forefront of Mastercard’s blockchain endeavors is the Multi-Token Network (MTN), a platform built on the company’s private, secure blockchain.
The MTN is designed to enable the use of tokenized bank deposits or central bank digital currencies (CBDCs) for transactions, leveraging the versatility of blockchain technology while adhering to Mastercard’s governance, compliance, and security standards.
The MTN’s potential is already being explored through various pilot programs. In Hong Kong, Mastercard has collaborated with Standard Chartered Bank (Hong Kong) Limited, Mox Bank Limited, and Libeara to test the use of tokenized deposits for purchasing carbon credits.
Late last year, the company completed another pilot in Hong Kong, demonstrating the MTN’s ability to settle digital asset transactions involving decentralized applications (dApps).
🚀 Big news! @Mastercard's FinSec Innovation Lab is now operating Kima Network validator nodes!
This marks a major milestone as we blend traditional finance with #blockchain technology. 🌐💳
Together, we're setting new standards in #DeFi security & innovation. The future of… pic.twitter.com/74Aful0XE4
— Kima Network (@KimaNetwork) May 15, 2024
Beyond Hong Kong, Mastercard has also wrapped up a similar project in Australia, further validating the MTN’s capabilities in facilitating trusted transactions on the blockchain using tokenized assets.
Crucially, the MTN is grounded in trust, a fundamental requirement for the widespread adoption of blockchain technology in financial services.
Mastercard recognizes that for blockchain to revolutionize cross-border and business-to-business payments, it must be safe, secure, and scalable – attributes that the MTN aims to provide.
Building on its experience in developing network capabilities for banks, Mastercard is offering straightforward ways for financial institutions to leverage the programmability of the MTN with bank deposits.
Banks do not need to run a separate blockchain ledger to participate; they can start with existing interfaces like cards for simple use cases and gradually upgrade to standards-based APIs for more complex applications.
The MTN’s potential has already attracted the attention of various app developers, who are exploring innovative use cases across sectors such as loan disbursement, carbon credits, and real estate transactions.
For instance, the property transaction company Coadjute is moving the escrow process to the MTN blockchain, creating a transparent infrastructure for the transfer of funds and enabling automated earmarking of funds for specific purposes.
Alongside the MTN, Mastercard is also fostering innovation through its Start Path Blockchain and Digital Assets program.
The program recently welcomed five new startups, including crypto payment and card issuer Kulipa, blockchain software firm Parafin, decentralized physical infrastructure network (DePin) firm peaq, data platform Triangle, and blockchain developer Venly.
Thrilled to announce that Venly has been chosen to participate in @Mastercard's 2024 Global Start Path Blockchain and Digital Assets Program! 🎉
Being acknowledged as a frontrunner in blockchain innovation is an honor. We can't wait to help shape the future of commerce through… pic.twitter.com/bp9Z1Nps8x
— Venly (@Venly_io) May 15, 2024
These startups will have the opportunity to collaborate with Mastercard, receive bespoke training, and gain access to the company’s customers and channels, allowing them to explore future use cases and scale new blockchain-based payment solutions.
Mastercard’s initiatives underscore the company’s commitment to exploring the intersection of traditional finance and emerging technologies like blockchain and Web3.
By collaborating with banks, fintechs, and other partners, Mastercard is actively developing and testing blockchain-based payment technologies and services that aim to revolutionize the way transactions are conducted, while ensuring the necessary trust, security, and scalability.
