Central bank digital currencies (CBDCs) have gained traction in recent months as countries worldwide look to develop their fiat currencies. However, the issuance of CBDCs is still a few years away. Mastercard is working on a smart contract technology that would help banks with developing the digital currencies.

Mastercard revealed this in its recent earnings call. CEO Michael Miebach told investors that Mastercard has a few partnerships in place. The company is helping central banks globally develop digital assets. He added that the they are focused on determining how smart contract technology can pair with CBDCs.
The payment company has always maintained that it is serving as a private-sector partner for CBDCs. It launched a testing environment platform for central banks a few months ago, making it possible for the banks to work together to simulate the issuance, distribution, and exchange of CBDCs. The platform also allows them to evaluate customized use cases for the CBDCs.
The CEO added that the concentration on smart contracts gives their work a new degree of specificity, and it could have other use cases beyond payments. He stated that "Specifically in CBDCs, I would describe it as relatively early days. Where we see our role to start with is to answer the question as you just asked, in partnership with governments, is what is the right construct."
Miebach added that the company is working on securing further partnerships with more central banks. He stated that the technology would have other use cases aside from payment. "As you heard us talking about, in the context of real-time payments, our go-to-market is always underlying infrastructure, application services. And we intend to do the same thing here. And that is, what is an application that could ride on top of this? It could be a smart trade contract," he added.
Hence, the need to develop the CBDC is to ensure the central banks continue to control the monetary system.
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