Mastercard is preparing its infrastructure for CBDC deployment

During an earnings call with investors and stakeholders, Mastercard CEO Michael Miebach discussed his positive outlook for the cryptocurrency industry. Not only has the company seen considerable growth in the number of consumers using Mastercard to purchase cryptocurrencies, but it has also entered into several partnerships with cryptocurrency companies. But in a discussion about central bank digital currencies (CBDCs), Miebach made his most ambitious point:

“What we’re saying is that the most likely opportunity for this technology to be used for payments right now is through government issuance in the form of a CBDC. We’ve said that on a couple of previous calls about that, and we’ve also said that when When the government is ready to launch a CBDC as a settlement currency in our network alongside the dollar or the euro, we will have our network ready."

Miebach remains confident about Mastercard's role in the matter, saying: "We can provide a safe field for governments and private banks to figure out how this really works."

Discussions about CBDCs have continued to heat up rapidly over the past year. On October 21, the Bahamas became the first country in the world to issue a CBDC (“Sand Dollar”). Just days later, Nigerian President Muhammadu Buhari announced plans to launch his own eNaira CBDC in the country.

Mastercard processed 113 billion transactions globally last year, second only to Visa's 188 billion and UnionPay's 151 billion, according to Statistica.

The world's third-largest payments processor has taken a keen interest in the cryptocurrency space in recent months. On Monday, Mastercard announced that it will partner with cryptocurrency marketplace Bakkt to enable its U.S. customers to trade digital currencies. In September, the company announced it would acquire blockchain analytics firm CipherTrace to track illicit transactions in 900 different cryptocurrencies. However, CEO Miiebach took a more risk-averse approach to the industry as a whole, as the company said on its third-quarter earnings call:

“Issues like the last mile — if you roll out a CBDC, how do you get the utility into the hands of your citizens. Acceptance issues and so on. So we’re going to facilitate investment as an asset class and be ready for CBDC. Should there be private sector stablecoins? We might as well. But we have very strict principles for when we should do something and when we shouldn’t.”

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