# Mastercard
There are a few reasons why Mastercard is investing resources in exploring crosschain interoperability:
1. Staying competitive - Mastercard has to keep innovating in the payments space as new technologies emerge fast. Developing solutions like MTN could help retain its competitive edge.
2. New revenue opportunities - Offering infrastructure and services related to regulated cross-chain transactions and assets creates new revenue streams for Mastercard.
3. Engaging crypto ecosystem - Initiatives like MTN allow Mastercard to engage with and expand into the emerging crypto/blockchain ecosystem in a compliant manner.
4. Customer expectations - Like banks and merchants, Mastercard's customers are exploring blockchain use cases. MTN could help meet their evolving needs.
5. Technology leadership - Pioneering compliant blockchain infrastructure could help reinforce Mastercard's image as a technology leader in payments.
6. Preparing for CBDCs - As central banks pilot CBDCs, Mastercard needs to enable CBDCs to work within its existing network and solutions.
7. Interoperability imperative - Enabling interoperability between traditional and blockchain-based financial systems is key to provides a seamless experience and leverage network effect.
8. Responsible innovation - Mastercard can innovate in digital assets in a regulated way, balancing innovation with compliance.
## 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. Industry Initiatives Participation
## 7. Resource
{% embed url="" %}
[Whitepaper - Unlocking the potential of digital asset innovation: Building a Mastercard Multi-Token Network](https://www.mastercard.com/news/media/5zmixdjy/unlocking-the-potential-of-digital-asset-innovation-building-a-mastercard-multi-token-network-1-1.pdf)
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