Mastercard, the global payment technology company, has announced the completion of a central bank digital currency (CBDC) pilot project in collaboration with the Reserve Bank of Australia (RBA) and other partners. The pilot tested the feasibility and functionality of using CBDCs for cross-border transactions between different digital currency platforms.
The pilot involved the issuance and exchange of two CBDCs, one denominated in Australian dollars and the other in Singapore dollars, using Mastercard’s distributed ledger technology (DLT) platform. The participants included banks, fintechs, and regulators from Australia, Singapore, and other regions. The pilot aimed to demonstrate how CBDCs can enhance efficiency, transparency, and interoperability in the global payment system.
According to Mastercard, the pilot achieved several key outcomes, such as:
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Enabling seamless and secure conversion and transfer of CBDCs between different DLT platforms, without the need for intermediaries or centralized infrastructure.
Supporting various use cases for CBDCs, such as wholesale settlement, cross-border remittance, trade finance, and foreign exchange.
Providing end-to-end visibility and traceability of CBDC transactions, as well as compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.
Offering flexibility and scalability for CBDC issuance and management, as well as compatibility with existing payment systems and standards.
Mastercard said that the pilot was part of its ongoing efforts to support central banks and governments in exploring and developing CBDCs, which are expected to play a key role in the future of money and digital economy. Mastercard also said that it will continue to work with the RBA and other partners to further test and refine the CBDC solutions.
Raj Dhamodharan, Executive Vice President of Digital Asset and Blockchain Products and Partnerships at Mastercard, said: “We are proud to have successfully completed this pilot with the RBA and our partners. This is a significant milestone for the advancement of CBDCs in Asia Pacific and globally.
We have demonstrated that it is possible to create a robust and interoperable CBDC ecosystem that can deliver real benefits for consumers, businesses, and governments. Mastercard is committed to being a trusted partner for central banks and governments in their journey towards digital currency innovation.”
The cryptocurrency market has grown exponentially in the past decade, reaching a market capitalization of over $2 trillion in 2021. This has attracted the attention of many traditional financial institutions, who see the potential of crypto as a new source of revenue, innovation and customer satisfaction.
According to a recent survey by KPMG, more than 60% of global banks are either already offering or planning to offer crypto services in the next two years. These services include custody, trading, lending, payments and advisory. Some of the leading banks in this space are JP Morgan, Goldman Sachs, BNY Mellon and Standard Chartered.
The benefits of offering crypto services are manifold. For banks, it can help them diversify their portfolio, increase their fee income, enhance their brand image and attract new customers. For customers, it can provide them with more choice, convenience, security and access to the emerging digital economy.
However, offering crypto services also comes with significant challenges and risks. Banks need to comply with complex and evolving regulatory frameworks, ensure adequate cybersecurity and anti-money laundering measures, manage volatility and liquidity issues, and educate their staff and customers about the benefits and risks of crypto.
To overcome these challenges and succeed in the crypto space, banks need to adopt a strategic and holistic approach. They need to partner with reputable and reliable crypto service providers, leverage their existing infrastructure and expertise, invest in innovation and research, and foster a culture of learning and collaboration. By doing so, banks can position themselves as leaders in the crypto industry and gain a competitive edge in the rapidly changing financial landscape.
Mastercard has completed a central bank digital currency pilot with the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre. The project tested how authorized parties, who have gone through know-your-customer protocols, could hold, use and redeem CBDCs.
GMX receives largest share of $40M Arbitrum STIP grants amid Tether Appointing new CEO
GMX, a decentralized exchange (DEX) that supports leveraged trading of perpetual contracts, has announced that it has received the largest share of the $40 million Strategic Treasury Investment Program (STIP) grants from Arbitrum, a layer-2 scaling solution for Ethereum.
According to a blog post published on October 13, GMX received $10 million worth of grants from Arbitrum, which will be used to bootstrap liquidity and incentivize users on its platform. GMX claims to be the first DEX to offer up to 30x leverage on perpetual contracts, as well as the first to support cross-margin trading with stablecoins and wrapped tokens.
GMX said that it chose Arbitrum as its layer-2 solution because of its compatibility with Ethereum, its fast and cheap transactions, and its growing ecosystem of projects and users. GMX also praised Arbitrum for its transparent and fair grant allocation process, which was based on objective criteria such as user growth, TVL (total value locked), and social engagement.
The STIP grants are part of Arbitrum’s initiative to support the development and adoption of its layer-2 network, which launched on mainnet in late August. Arbitrum aims to distribute $40 million worth of grants to projects that build on its platform over the next year, with the first batch of recipients announced on October 12.
Among the other projects that received grants from Arbitrum are Uniswap, SushiSwap, Balancer, Curve, Aave, Compound, MakerDAO, Synthetix, Chainlink, The Graph, and Etherscan. However, one notable project that missed out on the grants was Lido, a decentralized staking protocol that allows users to earn rewards on their staked ETH without locking it up.
Lido’s omission from the grant recipients sparked some controversy in the crypto community, as some users questioned Arbitrum’s criteria and decision-making process. Lido is one of the largest projects in the Ethereum ecosystem, with over $8 billion worth of ETH staked through its protocol. Lido also recently launched its stETH token on Arbitrum, which represents staked ETH on layer 2.
Lido’s team expressed their disappointment and confusion over Arbitrum’s decision on Twitter, saying that they had applied for the grants and had been in contact with Arbitrum’s team. They also said that they had received positive feedback from Arbitrum’s users and that they were looking forward to collaborating with them in the future.
Arbitrum’s team responded by saying that they had received over 400 applications for the grants and that they had to make some tough choices. They also said that they appreciated Lido’s work and that they hoped to work with them in the future. They added that the STIP grants are not a one-time event and that they will continue to distribute grants to more projects in the coming months.
Tether promotes Paolo Ardoino to CEO Role
Tether, the company behind the world’s largest stablecoin, has announced that Paolo Ardoino has been appointed as its new chief executive officer. Ardoino, who has been serving as the chief technology officer of Tether and its sister company Bitfinex since 2015, will take over the leadership role from Jean-Louis van der Velde, who will remain as a board member and advisor.
Ardoino is a veteran in the cryptocurrency industry, having joined Bitfinex as a senior software developer in 2014. He has been instrumental in developing and maintaining the technology platforms of both Bitfinex and Tether, as well as overseeing the integration of Tether with various blockchain networks, such as Ethereum, Tron, Algorand, and Solana. He is also a vocal advocate for innovation and transparency in the crypto space, often engaging with the community on social media and podcasts.
In a press release, Ardoino said that he is honored and excited to lead Tether into its next phase of growth and development. He added that he will continue to work closely with van der Velde and the rest of the team to ensure that Tether remains the most trusted and widely used stablecoin in the world.
Van der Velde, who has been the CEO of Tether since 2016, said that he is proud of what Tether has achieved under his tenure, especially in terms of expanding its market capitalization, user base, and network support. He also praised Ardoino for his technical expertise, vision, and leadership skills, saying that he is confident that he will take Tether to new heights of success.
Tether was launched in 2014 as a digital token pegged to the US dollar, aiming to provide a stable and transparent alternative to fiat currencies in the crypto ecosystem. Since then, Tether has grown to become the dominant stablecoin in terms of market capitalization, liquidity, and adoption, with over $70 billion worth of tokens in circulation across various blockchains. Tether claims that every token is backed by a corresponding reserve of fiat or other assets and publishes regular attestations from independent auditors to verify its reserves.