Mastercard Adds Fluency to Its CBDC Partners

Mastercard has chosen tokenized assets solutions company company Fluency to help it speak the language of CBDCs.

The collaboration, announced Friday (Aug. 18), is designed to capitalize on rising interest in central bank digital currencies (CBDCs), and puts Fluency in the company of other Mastercard CBDC partners, including CBDC platform Ripple.

According to a news release, Mastercard will use Fluency’s expertise to gain a greater understanding of the benefits of CBDCs and “how to implement them in a way that is seamless, secure, scalable and useful.”

Fluency CEO Inga Mullins said the partnership will help CBDC networks “seamlessly bridge transactions between different types of CBDC: account and token-based, retail and wholesale, multi-CBDC with tokenized assets and regulated stablecoins.”

The release notes that other partners include blockchain and Web3 software company ConsenSys, digital identity technology firm Idemia, digital identity consultant Consult Hyperion, security technology group Giesecke+Devrient and digital asset operations platform Fireblocks.

“We believe in payment choice and that interoperability across the different ways of making payments is an essential component of a flourishing economy,” said Raj Dhamodharan, Mastercard’s head of digital assets and blockchain.

“As we look ahead toward a digitally-driven future, it will be essential that the value held as a CBDC is as easy to use as other forms of money.”

As PYMNTS wrote last month, CBDCs are “on pretty much every central bank’s road map,” with 93% of these banks worldwide in at least some stage of CBDC development, according to data from the Bank of International Settlements.

However, some countries are expressing caution. As reported here last week, Colombia’s Banco de la Republica recently issued a paper calling for limits on CBDCs. 

Such limits, the paper argues, “could safeguard users from cyberattacks targeting their balances or transactions and reduce the demand for retail CBDC as store of value in competition with bank accounts.”

And a report earlier this month from the Bank of Canada questioned the need for central bank digital currencies.

“For a payment-oriented CBDC to successfully address unmet payment needs, the main consumer groups — who already have access to a range of payment options — would have to widely adopt the CBDC and use it at scale,” the bank argued.

Meanwhile, PYMNTS spoke last month with Mastercard Chief Digital Officer Jorn Lambert, who said the intrinsic value of blockchain still needs to be unlocked.

“Until there exists the ability to actually develop financially-regulated applications on the blockchain, the benefits will never go mainstream,” Lambert said. “Regulated financial institutions are crucial for [tokenized blockchain money movement vehicles] to truly scale.”