Mastercard to enter the bank token deposit market, with plans to expand into CBDC and stablecoin services in the future

Mastercard is building a test platform called the Multi-Token Network (MTN), which will start by exploring tokenized bank deposits and is set to launch in the UK in test mode this summer.

Mastercard Crypto Credential Service

Mastercard launched the Crypto Credential Service in April this year, which is a set of universal standards for proving interactions, utilizing CipherTrace technology. CipherTrace is a prominent blockchain analytics platform acquired by Mastercard at the end of 2021.

Cross-border transactions have been a focus for CipherTrace, the creator of cryptocurrency systems that help businesses comply with travel rules. According to these rules, whenever a cryptocurrency transaction between two parties exceeds $1,000 in value, the sender's cryptocurrency service provider must transmit the sender's personal identity information to the receiver's cryptocurrency service provider, and vice versa. Mastercard emphasizes that this credential service complies with the travel rules required by the Financial Action Task Force (FATF).

Note: The Travel Rule is a financial regulatory policy aimed at preventing money laundering and terrorism financing activities. It requires financial institutions to provide identity information about the sender and receiver when conducting fund transfers.

Multi-Token Network (MTN)

According to CoinDesk, Mastercard is establishing a test platform called the Multi-Token Network (MTN), starting with exploring tokenized bank deposits, set to launch in test mode in the UK this summer.

Raj Dhamodharan, Head of Crypto and Blockchain at Mastercard, stated that many banks and financial institutions are invited to participate, and the MTN project plans to embrace central bank digital currencies and regulated stablecoins at the right time.

Dhamodharan noted:

The driving force of today's global economy is regulated funds within banks, so we start with tokenizing bank deposits, turning currency units in bank accounts into digital assets on the blockchain, bringing them programmability similar to digital currencies in the crypto ecosystem.

This can also integrate perfectly with Mastercard's previously launched Crypto Credential Service to ensure transactions comply with regulations such as anti-money laundering (AML) requirements.

JPMorgan Chase & Co. is a precursor in tokenizing deposits! JPMorgan has expanded its significant project of introducing blockchain technology into traditional banking this month, with the bank-issued "JPM Coin" allowing corporate clients to make payments in euros in addition to US dollars.