According to the SCMP report, Mastercard is currently in talks with the Central Bank of China to support the cross-border use of the digital yuan.
It is worth remembering that a CBDC, the digital yuan, is currently being tested in China. Therefore, once the widespread launch of the national cryptocurrency is complete, there is interest that the digital yuan can cross borders.
In this way, Mastercard becomes one of the first companies to express its desire to support the digital yuan in its mission. Use China’s CBDC in cross-border transactions.
So the idea is to use Mastercard’s global payment network, consisting of 2 million ATMs and 70 million business partners, to convert central bank digital currencies (CBDCs) into foreign currencies.
Extending the adoption of CBDCs
As we have previously reported on CryptoTrend, the People’s Bank of China is exploring ways to expand the use of the Digital Yuan. Especially in the greater bay area.
In fact, it is currently testing digital currency electronic payment (DCEP) with the digital yuan in key cities. For example, in Suzhou, Xiongan, Shenzhen, and Chengdu.
“Central bank digital currencies, such as the one being tested by Beijing, could circulate outside their home countries and be converted into foreign currencies through a card clearing network acting as a conversion agent,” wrote South China Morning. Post quoting the Mastercard representative.
However, Ling Hai, Co-Chairman of Mastercard Asia-Pacific, explained that, “If central banks can address their internal problems associated with digital sovereign currencies, the role we can always play is interoperability when payment crosses the borders of a country”.
Therefore, “for us, supporting a central bank’s digital currency is similar to adding another fiat currency to our network.”
So, in addition to offering its payment network, Mastercard also offers the possibility of a prepaid card. This with the aim that users can store and convert the digital yuan to fiat currencies while initiating cross-border transactions.