Mastercard seeks to work with China over digital currency

Mastercard seeks to work with China over digital currency

China’s central bank is in talks with Mastercard over the development of the country’s digital currency (CBDC).

Reports in the South China Morning Post say that Mastercard could support the use of the digital yuan for cross-border transactions and its conversion to and from foreign currencies

Mastercard Asia-Pacific co-president Ling Hai told the Hong Kong-based newspaper that the People’s Bank of China (PBOC) is one of a number of central banks that Mastercard is in discussions with, in order “to enable cross-border use of their respective digital currencies”.

“Central bank digital currencies such as that being piloted by Beijing could be circulated outside their home countries and converted into foreign currencies via a card clearing network acting as the conversion agent,” Ling Hai said.

Mastercard is also considering introducing a prepaid card, enabling users to store and convert digital yuan.

“While central banks can address their domestic issues associated with digital sovereign currencies, the role we can always play is on interoperability, when the payment goes beyond a country’s borders,” Ling Hai added. “For us, supporting a central bank digital currency is similar to adding another fiat currency onto our network.

“Conversion across a hybrid of both fiat and digital currencies could hold the key to broadening merchants’ acceptance of central bank digital currencies.”