Mastercard

1. Problems/Challenges it aims to solve


Addresses four key issues in the digital asset landscape including:
  • Lack of confidence in counterparty compliance
  • Lack of trust in the underlying store of value
  • Lack of interoperability between networks
  • Lack of clear governance procedures to set the rules of the road for participants.
​

2. Solutions


​
Mastercard Multi-Token Network (MTN): MTN is a network overlay across multiple blockchains to enable compliant transaction with validated counterparties. It provides a set of foundational capabilities designed to make transactions within digital asset and blockchain ecosystems more secure, scalable and interoperable — ultimately enabling more efficient payment and commerce applications. MTN will leverage Mastercard Crypto Credential, a solution announced in April, to establish common verification standards and infrastructure.
​
Services provided:
  • MTN Governance Framework
    • Compliance monitoring
    • Network governance
  • Access to Stable and Regulated Money-like Assets
    • Collateralized stablecoins
    • CBDCs
    • Tokenized deposits
  • MTN Wrapping Service
    • Secure cross-chain transactions: Facilitates secure transactions across different blockchain ecosystems
    • No need to share bank or VASP: Allows for seamless transactions even if users do not share the same VASP or bank
    • Seamless transactions between providers: Enhances interoperability between various financial service providers to streamline transactions.
​

3. Target Customers


​
  • Banks: Offered a trusted compliance framework, tokenization of bank deposits, and the opportunity to continue core business operations
  • Consumers: Provided with a simpler and safer way to access digital assets, using the same accounts for both traditional and digital transactions, and ensuring robust data privacy and consumer protections
  • Businesses: Offered turnkey standards for secure and compliant blockchain-based applications, with ensured interoperability and strong data privacy and consumer protections
​

4. Key Points


  • MTN Foundation and Structure
    • Forms a secure network overlay using a group of validated counterparties
    • Operates across multiple public and private blockchains
    • Ensures all transactions comply with regulations and adhere to specific governance rules
  • Onboarding Process for Banks and VASPs
    • Must meet stringent, case-based onboarding standards
    • Implementation of robust KYC, KYB processes
    • Continuous screening and monitoring to prevent illicit activities including money laundering and terrorist financing
  • Stable and Regulated Payment Tokens
    • Money-like assets to be used as trusted store of value and medium of exchange in the network
    • Includes fully collateralized stablecoins, CBDCs, and tokenized retail bank deposits
  • Facilitating Secure Cross-chain Interoperability
    • Addresses issues of fragmented networks and security vulnerabilities
    • Enables secure cross-chain interoperability across blockchains and traditional networks
  • Comprehensive Governance Framework
    • Establishing rules to govern interactions between network participants
    • Ensures protection for consumers and businesses, and outlines liability among participants
    • Leverages Mastercard's experience in developing rules for payment networks
  • Confidence in Transaction Compliance within MTN
    • Transactions settled on public or private chains can be conducted with confidence in their compliance
    • Transactions settled on underlying chains but all MTN transactions are compliant
    • Provides clarity and predictability in the rules governing transactions
  • Shared Set of Commercial Terms and Standards
    • Establishes uniform transaction standards, remedies, and technologies for digital asset payments
    • Allows seamless transactions across various chains in a secure and compliant manner
  • Potential Features of the MTN
    • Offers consumer protections including zero-liability guarantees and potential reversals
    • Standardizes terms and conditions for certain programmable smart contracts
    • Clearly delineates the tokens permitted for use as payment on the network
    • Users can utilize digital representations of a portion of their bank deposits in transactions on the MTN
    • These "tokenized deposits" can interact natively with other tokens and be used in programmable smart contracts
  • MTN Compatible Wallet
    • Facilitates customer interactions through a wallet compatible with MTN
    • Provided by a bank, VASP, or other licensed entity allowing interaction with crypto assets from various blockchains
  • Allocation of Liability and Smart Contracts
    • Rules allocating liability among participants, with some being executed through smart contracts
    • Enables efficient and automated execution of pre-programmed governance mechanisms

5. People

Raj Dhamodharan - Executive Vice President, Blockchain and Digital Assets.

6. Resource

Last modified 18d ago