**Mastercard blockchain lead: Adoption of central bank digital currencies ‘difficult’**
*By [Author Name]*
SINGAPORE – Amid ongoing discussions about the potential widespread use of central bank digital currencies (CBDCs), Ashok Venkateswaran, Mastercard’s blockchain and digital assets lead for Asia-Pacific, expressed on Wednesday that broad adoption of such assets is currently facing several challenges.
## The Difficulties of CBDC Adoption
In an interview with CNBC during the Singapore FinTech Festival, Venkateswaran highlighted the challenging aspects of CBDC adoption, mentioning that the ability to spend a retail CBDC anywhere, similar to cash, is a crucial consideration. Retail CBDCs refer to the digital form of fiat currency issued by a central bank, targeting individuals and businesses for everyday transactions, as opposed to wholesale CBDCs used exclusively for interbank transactions.
## Global Landscape and Infrastructure Challenges
The International Monetary Fund (IMF) has identified CBDCs as a safe and low-cost alternative to cash, with approximately 60% of countries exploring CBDCs but only 11 countries having adopted them. Venkateswaran pointed out that building the necessary infrastructure to facilitate CBDC use demands significant time and effort, and that many central banks are working closely with private companies to create the required ecosystem.
## Consumer Comfort and Pilot Programs
Venkateswaran also emphasized that consumer comfort with traditional money has hindered the need for CBDCs, noting that the justification for their implementation remains insufficient. However, Mastercard recently completed testing of its retail CBDC solution as part of the Hong Kong Monetary Authority’s e-HKD pilot program, demonstrating an initial step towards understanding and implementing the technology.
## Regional Context and Singapore’s Pilots
The Asia-Pacific lead highlighted Singapore’s efficient payments system as a reason why the case for retail CBDCs is unconvincing. Instead, Singapore focuses on the potential for wholesale CBDCs for interbank settlements. This sentiment aligns with Singapore’s central bank’s recent announcement of plans to pilot wholesale CBDC issuance and usage from 2024.
## Key Considerations for CBDC Implementation
Venkateswaran underscored the importance of understanding the specific needs and challenges of each country when considering CBDC implementation. He noted that CBDCs may be beneficial for countries with less robust domestic payment networks, but emphasized that replacing existing networks should not be the sole goal.
In conclusion, Mastercard’s perspective on the current state of CBDC adoption suggests that while the potential benefits of these digital currencies are recognized, multiple challenges, including consumer behavior and necessary infrastructure, still need to be addressed to realize their widespread usage.
I have been featured in numerous publications, both online and offline, and am a regular speaker at industry events. I am also the founder of Crypto University, an online educational platform that helps people learn about cryptocurrencies and blockchain technology. In addition to my writing and teaching career, I am also an active investor in the cryptocurrency space. I have made investments in some of the leading projects in the space, and my portfolio has outperformed the market by a wide margin