Mastercard and Reserve Bank of Australia Test CBDC on Ethereum Utilizing Authorized Parties

Payments processing giant Mastercard and the Reserve Bank of Australia (RBA) have successfully tested the interoperability of a central bank digital asset (CBDC) and the ability to restrict the use of that currency to “authorized parties.”

Mastercard’s solution enabled the holder of a pilot CBDC to purchase a non-fungible token (NFT) listed on Ethereum (ETH), according to a new press release from the company.

The RBA’s pilot CBDC platform locked the specified amount of currency and minted the same amount of wrapped pilot CBDC on Ethereum.

Mastercard says its solution “includes controls ensuring that the pilot CBDC can be held, used, and redeemed only by authorized parties that have been Know Your Customer (KYC) verified and risk assessed by licensed service providers.”

The test transaction required that both the buyer and sellers’ Ethereum wallets and the NFT marketplace smart contract were “allow-listed” within the platform.

Central bank digital currencies are a controversial topic in the crypto community, with numerous prominent developers and politicians raising concerns that CBDC transactions would reduce people’s privacy and expose citizens to financial censorship.

Last month, US Republican lawmakers in the House Financial Services Committee voted in favor of a proposed law that aims to stop the Federal Reserve from issuing a CBDC. The bill was sent to the full House for consideration.

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This article was originally reported on The Daily Hodl.