Mastercard, a leading provider of electronic payment services, is increasingly interested in the crypto sector.
Just yesterday it announced that a new product called “Multi Token Network” will be launched in beta phase this summer, which serves as a kind of blockchain app store for the development of hybrid solutions that can mediate between the security of services offered by financial intermediaries and the effectiveness of cryptocurrencies.
Full details below.
Mastercard and crypto: designed the new app store of the blockchain world
Mastercard is showing that it is genuinely interested in the world of cryptocurrencies: an example of this is the latest announcement by the multinational electronic payments company that it is launching a pilot project to explore innovative solutions in the Web3 sphere.
This is the “Multi Token Network” (MNT), a kind of app store of the blockchain industry that offers developers a wide range of solutions to create applications that can integrate with the dynamics of financial institutions.
No one until now had thought of infrastructure like this that could solve many trust issues and bridge many gaps that prevent mass adoption in the cryptocurrency industry
Indeed, the crypto industry’s association with the world’s second largest debit and credit card provider after Visa could very easily bring together a huge amount of developers and users who currently fear the risks of self custody.
The platform will be launched in beta phase during this summer and will be tested initially in the United Kingdom and then consider expansion to more countries and continents.
To incentivize the development of this solution, which is a hybrid between the purely decentralized world and the world in which central institutions are trusted, Mastercard has created an event called the MTN Innovation Sprint.
The occasion will be central to including several projects in building an ecosystem of applications based on blockchain technology.
According to Fortune reports, the infrastructure will be built on Ethereum, so it should attract a large pool of solidity developers.
Mastercard’s head of crypto products, Raj Dhamodharan, commented on the announcement of the Multi Token Network in a letter yesterday as follows:
“It serves as a testbed for the development of live pilot applications and use cases with financial institutions, fintechs, and central banks.”
Tokenized bank deposits: the first experiment of the “Multi Token Network”
The first crypto experiment to be introduced within Mastercard’s Multi Token Network is the possibility of tokenized bank deposits.
This is a real revolution in which bank deposits, secured by all the protections of financial institutions, are tokenized to become part of the on-chain world.
In February, JPMorgan had also proposed a similar idea, but it would go against the tide as it intended to replace the presence of stablecoins in the crypto sector.
Instead, in this case, they plan to include regulated stablecoins in the project in addition to the digital currencies of central banks.
As a reminder, in Europe, following the European Parliament‘s approval of the “Market in Crypto Assets” (MICA) regulatory framework that will finally come into force in 2024, stablecoins have officially entered full legality (with constraints to be met).
To introduce the ambitious project Dhamodharan commented as follows during an interview with Coindesk:
“What fuels the global economy today is regulated money in banks,” Dhamodharan said in an interview with CoinDesk.
Thus we are starting to do tokenized bank deposits, so the unit of money in a bank account is a digital asset on the blockchain, bringing the same level of programmability to those you find with digital currency in the crypto ecosystem.”
While this could open the door to increased activity in the blockchain world, with obvious benefits for the entire crypto community, the question remains whether the “Multi Token Network” could undermine the freedom of individuals.
Bitcoin was introduced to the world as a P2P payment network capable of overtaking fiduciary intermediaries, such as Mastercard itself.
Over the years, Ethereum has created a decentralized infrastructure that serves as a “global computer for the world,” able to offer security within a functional operating framework for developers, without relying on any central institution.
Everything Mastercard is proposing is not actually required by the crypto community.
The convenience of a financial infrastructure that can secure deposits is not worth the loss of privacy and freedom gained during these last few years.
If one wants to protect oneself from the risks of decentralization, there are decentralized insurance solutions such as Nexus Mutual and Insurance that solve these issues.
If you are afraid of self custody, just choose more complex custody solutions to achieve a higher degree of security, such as hardware wallet or multi-signature wallet.
Let’s not be fooled. We don’t need anything except a seed phrase kept in a safe place and a few satoshi and Ether in the wallet.
Source: https://en.cryptonomist.ch/2023/06/29/mastercard-increasingly-focused-crypto/