Mastercard backs integration of blockchain and traditional finance

Mastercard’s Chief Digital Officer Jorn Lambert says it is necessary to unite blockchain and traditional finance.

In his view, this would facilitate the mass adoption of distributed ledger technology, addressing the trust deficit in the industry.

«To scale, you need to move existing regulated money, backed by central banks, into blockchain. This has not yet been done», Lambert said.

He proposed using tokenized deposits as one of the safe ways to transfer assets of commercial banks into a digital form.

In his view, uniting blockchain with the traditional financial system is currently impossible due to the lack of “a basis for operating in a secure environment”.

«[Any solution for digital assets] must be real-world compatible and interoperable across different blockchains […]. And if something goes wrong, you need rules to resolve these problems», Lambert said.

The executive said that blockchain could simplify cross-border payments, trade and insurance through asset tokenization and programmability of transactions.

Lambert added that CBDC would not help solve the existing trust problem, noting that they have scalability issues.

Earlier Mastercardannounced pilot testing of tokenized deposits using the Multi-Token Network.

In October 2022 itreported plans to act as an intermediary for traditional financial institutions in launching cryptocurrency trading.