Mastercard is launching a new program called Multi Token Network (MTN). This is designed to make digital asset and blockchain transactions safer, faster and easier to use for different types of payment and commerce applications.
The company states that its vision for MTN is to “…offer a set of fundamental capabilities designed to make transactions across the digital asset and blockchain ecosystems secure, scalable and interoperable – ultimately enabling more efficient payment and commerce applications.”
What the MTN means
Simply put, the MTN controlled by Mastercard has four main goals that it appears to be addressing:
- Counterparty trust: This means ensuring that the people or companies involved in a transaction can trust each other. Mastercard is working to create common standards and infrastructure for verifying identities and permissions on blockchain networks. This will help consumers and businesses to interact with confidence.
- Trust in digital payment assets: This includes creating stable, regulated and scalable tokens for payment applications. Mastercard has already experimented with tokens representing deposits with commercial banks, and MTN will continue to support these efforts.
- Trust in technology: This goal focuses on improving the ability of blockchain networks to handle high volumes of transactions and communicate effectively with each other. Mastercard has been working with the Reserve Bank of Australia and other partners on a pilot program that demonstrates how this can be done, and the MTN will aim to broaden these opportunities.
- Confidence in consumer protection: MTN will use Mastercard’s experience in establishing standards and regulations for its card network to create a framework that prioritizes consumer protection, stability and regulatory compliance. This means establishing clear guidelines that ensure users are protected and the system runs smoothly.
Mastercard sees the MTN as a major step forward in its work with digital assets. It shows their commitment to creating payment solutions that are secure, easily accessible and always available. The goal is to help build confidence in the future of the digital asset industry.
A trial version of MTN will be available in the UK from Q3, which will be used to develop and test applications with financial institutions, fintech companies and central banks. Initially, the applications will use tokens representing bank deposits and over time, Mastercard plans to make MTN available in other parts of the world.
An important initiative
Mastercard’s Multi Token Network (MTN) has the potential to become a big deal. If all goes according to plan, the payment processor expects to make buying and selling things with digital money safer and easier. This initiative highlights the benefits offered by the use of blockchain technology, along with demonstrating that Mastercard is serious about using it for use as digital money. This could change the way we use digital money, making it more common in everyday shopping, and it’s a big step in making digital money a regular part of our lives.
It should be noted that the announcement of the MTN network is not Mastercard’s first foray into digital assets. The following are some notable examples from recent years, highlighting payment processors’ long-standing interest in the industry.
- Mastercard-Bakkt Partnership: Mastercard partnered with Bakkt to offer innovative crypto and loyalty solutions. This partnership enables Mastercard customers to buy, sell and hold cryptocurrency and also offers the option to pay with cryptocurrency via branded debit and credit cards. In addition, Mastercard integrated cryptocurrency into its loyalty solutions, allowing partners to offer cryptocurrency as rewards and create a conversion between loyalty points and other digital assets.
- CipherTrace Acquisition: Mastercard has acquired CipherTrace, a blockchain security firm, to enhance its digital asset capabilities.
- Start Path Program: Mastercard launched the Start Path Program, a global startup engagement initiative that supports high-growth digital asset, blockchain, and cryptocurrency companies. The program aims to expand and accelerate innovation in the digital asset technology sector, making it safer and easier for people and institutions to buy, spend and hold cryptocurrencies and digital assets. The program includes startups such as GK8, Domain Money, Mintable, SupraOracles, STACS, Taurus, and Uphold.
- Engagement in the digital currency ecosystem: Mastercard has been actively involved in the digital currency ecosystem since 2015, bridging mainstream financial principles with digital asset innovations. It supports the startup ecosystem and since 2014, more than 250 startups have participated in the Start Path program.
Look forward to something
In general, Mastercard uses new technology such as blockchain to make payments better and easier. As a result, we may soon see rival payment processors also want to use similar technology to stay in the game. However, when and how this happens depends on many things, such as pre-existing business plans, technical skills and the rules to be followed. While it’s not known when this will happen, it’s reasonable to expect more companies to make similar moves to Mastercard’s.