With the advent and teeming popularity of National Digital Currencies, payments gateway giants Visa, Mastercard and PayPal look set to be cut out of their payment intermediary role, which has been a major source of their global profitability so far.
As things stand, up to 80% of the world's countries are already considering the possibility of issuing their own national digital currencies or central bank digital currencies (CBDCs) as they are otherwise called. Tunisia and Senegal have already commissioned and made theirs public, while China has released a pilot version of its 'Digital Yuan' in Hong Kong and parts of Beijing.
So as not to be left out in this coming money dispensation, Mastercard is serving as a model on how these global payment intermediaries can renegotiate their relevance into the implementation framework for CBDCs.
In light of this, Mastercard recently launched a CBDCs virtual testing platform that would allow central banks to test run their proposed central bank digital currencies (CBDCs) so as to see how feasibly they would work in real life.
This would enhance the proposed CBDCs' chances for successful implementation, effective issuance and efficient operation, whilst also guiding central banks to choose the most suitable tech stacks for their currencies and helping them to ascertain the currencies' compatibility with existing payment rails and payment cards.
Visa, meanwhile, had previously stated as far back as July 2020 that it would do more to support digital currencies and blockchains, and should definitely be looking to adopt this leaf from Mastercard's playbook. And so should PayPal and the others.
These should make it a case of "If you can't beat them, join them," as the popular saying goes, proactively creating other similar or unique facilities that would form part of the global implementation framework for CBDCs, should they take over the global money market in the nearer future, as recent rends suggest.
In the meantime, Mastercard International Markets President Gilberto Caldart, underlining Mastercard's readiness for whatever turn the national digital currencies tide might take, says, "There are a lot of countries thinking about digital currencies. "There are a lot of unanswered questions about what really is digital currency, how it will operate and so on. Our view is, 'Let's see how it goes.'"