Is The World Ready For Digital Currencies? Mastercard's Senior Executive Weighs In

Mastercard Incorporated's MA senior executive reportedly slammed the usage of central bank digital currencies, claiming there isn't enough reason for the widespread use of them right now.

Ashok Venkateswaran, Mastercard's blockchain and digital assets lead for Asia-Pacific told CNBC, "The difficult part is adoption. So if you have CBDCs in your wallet, you should have the ability for you to spend it anywhere you want – very similar to cash today."

A retail Central Bank Digital Currency (CBDC), representing the digital version of a country's fiat currency issued by the central bank, is designed for use by individuals and businesses for daily transactions. CNBC added. 

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In contrast, a wholesale CBDC is utilized solely by central banks, commercial banks, and financial institutions for settling high-value transactions between banks, the report added.

The International Monetary Fund views Central Bank Digital Currencies (CBDCs) as "a safe and low-cost alternative" to traditional cash. Currently, around 60% of countries globally are exploring the concept of CBDCs. 

However, only 11 countries have fully adopted them, while 53 are in the advanced stages of planning and 46 are researching the topic, based on June data from the Atlantic Council, CNBC noted.

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Building the necessary infrastructure for CBDCs demands significant time and effort from countries. 

Central banks are becoming more innovative by collaborating closely with private companies to establish this ecosystem, as noted by the Asia-Pacific lead.

Despite these advancements, Venkateswaran observed that consumers' comfort with existing forms of money means there is "not enough justification to have a CBDC" at this stage, the report read.

"But if it's a country where the domestic payment network is not as robust, it may make sense to have a CBDC," Venkateswaran told CNBC. 

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Price Action: MA shares are trading lower by 0.53% to $399.21 on the last check Friday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.