Payments giant Mastercard says adoption is the most challenging part for state-issued digital currencies.
The second-largest payment-processing provider, Mastercard, sees no prospects for central bank digital currencies (CBDCs) shortly, as consumers nowadays are “comfortable using today’s type of money.”
In an interview with CNBC, Ashok Venkateswaran, APAC head for digital assets and blockchain at Mastercard, said there isn’t enough justification for having a CBDC, adding that cash is still the most frequently used means of payment.
“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.”
Ashok Venkateswaran, APAC head for digital assets and blockchain at Mastercard
However, the APAC head admitted there might be a use case for CBDCs, but for interbank settlements. Venkateswaran particularly addressed Singapore and its struggles with adopting the local retail CBDC. He noted that the state-run digital currency is not compelling enough, given that the region has a “very efficient” payment system.
“There isn’t a reason for a retail CBDC [in Singapore] but there is a case for a wholesale CBDC for interbank settlements.”
Venkateswaran’s comments come after Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), said that CBDCs could eventually replace cash, which is “costly to distribute in island economies.”
The IMF boss noted that digital currencies could “offer resilience” in more advanced economies, adding that CBDCs are posed to “improve financial inclusion where few hold bank accounts.”