Mastercard is foreseeing a future for money, that would bring people plenty of options to decide from on how they wish to utilise their assets. The card payments major has predicted that blockchain can bring that element of programmability to money as we know and use today. To make blockchain-based financial ecosystems secure, scalable, and interoperable — Mastercard is creating the ‘Multi-Token Network (MTN)’. This MTN solution will be loaded with foundational abilities, that would enlarge blockchain’s overall potential usability.
With the MTN, Mastercard is exploring if the unit of money in an individual’s bank account could be transformed into a digital saving on the blockchain. This could open more use cases of digital money, the company believes.
“Last year, we tested the use of tokenised commercial bank deposits between several financial institutions, settling through our existing network. MTN will support and complement these efforts by enabling regulated payment tokens to power financial applications,” an official statement from Raj Dhamodharan, head of crypto and blockchain said on June 28.
Asset tokenisation is the process of creating digital units of a physical or virtual property and storing them on blockchains. Tokenising an asset can increase its liquidity. Almost anything can be tokenised. They may be exotic things like sports teams, artworks, and celeb merchandises as well as traditional assets like binds, commodities, capital funds, and real estate, claims a recent blog by Hadera.com.
Tokenised stocks are often backed 1:1 to traditional stocks. This lets holders get the same benefits as owning the underlying stock.
“Scalability of blockchain networks and interoperability among them are critical technologies required for safe transfers of tokens and assets. In bringing the power of 24/7 operations, programmability and immutability to all aspects of the economy, blockchain capabilities and tokenisation can reach their full potential, delivering true transformation. MTN represents one of Mastercard’s most ambitious projects in the digital asset space to date,” Dhamodharan noted.
In the coming weeks, Mastercard’s MTN will be made available in beta mode in the UK. The company, headquartered in the US, has been making efforts to become early adopter and facilitator of digital assets and Web3.
Mastercard, in April said it was expanding its cryptocurrency payment card programme by seeking more partnerships with crypto firms, even as the sector comes under closer scrutiny from regulators and banks grow wary.
In November last year, Mastercard, HSBC and Wells Fargo, among others in a group of bank giants in the US, launched a digital dollar blockchain project amid the ongoing slump in the shaken crypto market.