Mastercard will launch pilot tests of the Multi-Token Network (MTN). As part of the initiative, the payments giant will conduct experiments with tokenized bank deposits.
MTN will be available in beta this summer in the United Kingdom. A number of banks and financial institutions have been invited to participate.
As part of the innovation sprint, selected teams will gain access to MTN’s capabilities to develop promising use cases for tokenized deposits.
Rajat Damodaran, head of the company’s Crypto and Blockchain division, expects that over time the initiative will also touch on stablecoins and CBDC.
«Today, the global economy is driven by regulated money in banks. We start with tokenized bank deposits. In this way, the unit of money in a bank account is a digital asset on the blockchain, providing the same level of programmability as digital currency in the crypto ecosystem,» — explained.
The initial types of applications and use cases Mastercard intends to promote with tokenized banking money align with the Mastercard Crypto Credentials project Mastercard Crypto Credentials. The latter is a blockchain-analytics service that guarantees compliance with AML.
«Suppose a bank in the United Kingdom has such a tokenized form of a deposit at an institution. Suppose that another bank in Singapore has the same counterpart. One can be exchanged for the other, which historically posed many problems in terms of the ability to move quickly and flexibly,» — a specialist explained.
As reported in October 2022, Mastercard said it planned to act as an intermediary for traditional financial institutions in launching cryptocurrency trading.
In the same month the company announced the launch of the Crypto Secure tool. It will enable banks to identify and halt transactions with crypto exchanges exposed to fraudulent practices.