Unveiling Mastercard's Multi-Token Network (MTN): Asset tokenization transforms financial services, paving the way for packaging CBDCs on the blockchain.

In the latest episode of "The Scoop" podcast by the foreign media outlet The Block, Raj Dhamodharan, the cryptocurrency and blockchain executive at Mastercard, was invited for an interview. During the program, they discussed how Mastercard's multi-currency network could bring changes to the current financial services landscape, and also revealed their recent development in CBDC packaging technology.

Introduction to Mastercard's Multi-Token Network, MTN

The focus of this segment is mainly on Mastercard's Multi-Token Network, MTN project announced at the end of June this year. Raj mentioned that MTN is actually a set of technology and a platform that allows people to build solutions on the blockchain. On the platform, you can see digital tokens related to payment endpoints, such as Central Bank Digital Currencies (CBDCs), cryptocurrencies, stablecoins issued by financial institutions, and tokenized deposits. Additionally, you can also see digital tokens related to asset endpoints, such as carbon credit NFTs, securities, and bonds.

"MTN is a platform for individuals to use assets and payment endpoint tokens to create compliant payment applications," Raj said.

Regarding this upcoming token network that seems to be able to offer various functionalities, host Frank asked whether the applications on this network would be similar to Mastercard's existing applications or if there would be entirely new products relative to current financial services.

The discussion then shifted to cross-border transactions, where Raj mentioned various issues in this transaction mode, such as the speed of fund transfers between countries, efficient transaction settlements, and the related transaction risks when funds pass through corresponding banking systems. Raj believes that if these assets and payments are in token form, like CBDCs and stablecoins, value transfers can happen faster and reduce counterparty risks.

Furthermore, when assets exist in token form, developers can apply application logic in smart contracts, providing better development flexibility to create conditional payments, both on-chain and off-chain, which is currently difficult in the existing application environment.

Therefore, the answer to this question is affirmative - it not only makes existing applications more convenient but also paves the way for innovative financial products.

Mastercard has Developed CBDC Wrapping and Transfer Technology

During the interview, Frank and Raj discussed complex multilateral transaction behaviors. Raj mentioned that in such transaction scenarios involving multiple commercial agreements, it is not possible to complete all transactions in a single system, and transaction settlements usually take several days.

However, if assets exist in the form of digital tokens, it would facilitate asset exchanges. Mastercard believes that this is the evolution of assets, which will gradually tokenize following regulatory and market conditions.

Additionally, Raj brought up an existing case where the Reserve Bank of Australia has launched an initial system for Mastercard's pilot system with CBDC on a private blockchain. The Reserve Bank of Australia aims to enable its CBDC to be used for payments on other public chains. To achieve this, Raj mentioned that the Mastercard team has developed technology to wrap CBDC and transfer it to other public chains for transactions.

"A token created in a non-public chain system can be converted into a tradable form and used in all applications that can be built on public chains," Raj said.

Finally, Raj mentioned that over 100 companies are currently applying to build applications on MTN, and in the upcoming Mastercard events, some usage cases will be showcased, with a few set to go live in the near future. However, the product launch date and market are still under planning, awaiting further official announcements.