After 10 years since Bitcoin appeared in the financial markets, central banks in many countries have been quietly learning and developing their own digital currency. According to information revealed from Mastercard, they are building a simulation engine that works in the real world of virtual currencies.
On Wednesday morning, Mastercard, the payments giant officially announced to the media and press about their project, "Central Bank's Digital Currency Checking Platform". This is indeed a bland name, but it will probably find compatibility with evil banks.
For the Federal Reserve and the Central Banks, a currency that has no connection to coins or paper bills, a purely digital currency is sure to be a powerful, far-reaching transformation. than existing electronic money transfer platforms. Central banks, for example, can be delivered directly to consumers without the help of a third party and cling to commercial banks. With backing from the State, the digital currency will certainly bring more efficiency in money transfer and payments. This solution allows units to settle transactions instantly, avoiding the excessive rotation of banks and clearing facilities that will make transactions take place long-term.
In technology's parlance, Mastercard's foundation is a "sandbox" that will assist central banks in issuing versions of their digital-currencies in a controlled and controlled environment. These currencies connect to existing banks and payment networks and test their suitability to consumers' lives, needs, and purchases of goods and services.
In an interview with Fortune, Mastercard EVP Raj Dhamodharan said the company has worked with several central banks and that they are inviting third parties ranging from banks to fintech companies, to technology to participate in my pilot project.
Mastercard comes up with its initiative at just the right moment when interest is popping up on cryptocurrencies among central banks. A survey by the International Monetary Fund in 2018, cited from the Wall Street Journal, showed that the government bank is piloting this new technology to cut costs and prevent influx. The same increase in private cryptocurrency as BitCoin. More recently, a new survey from the Bank for International Settlements found that 80% of the world's central banks are conducting research and testing cryptocurrencies.
Being protected and backed by the State has made the birth of digital currency associated with political significance. The People's Bank of China is about to launch a digital yuan. This makes many people believe that China and its digital yuan will usurp the throne of the greenback in global trade. Meanwhile, the outgoing Bank of England governor Mark Carney, last year speculated that a group of companies could support a new digital currency to challenge the role of the dollar as a preeminent reserve currency.
The war for market share does not stop there when a group of companies led by Facebook is researching and launching a new digital currency called Libra. The latest release says that the coin can provide billions of social media users with a new way of shopping, a new way to pay fast.
While projects such as the renminbi or digital currency or the Libra virtual currency are getting a lot of praise, they are both taking significant privacy risks, as the system on which money moves. can keep track of who is spending money and where.
According to Dhamodharan, Mastercard is sensitive to privacy issues and is building a test suite to reflect that. He declined to provide any details about the software Mastercard is using to implement its test network, other than saying it involves blockchain - the same technology that Bitcoin was made of.