The pilot used the Mastercard Multi-Token Network to settle Web3 transactions involving decentralized applications and digital assets, such as NFTs. The pilot also showcased the potential for funding and settlement in and out of Web3 marketplaces via a retail central bank digital currency (CBDC), such as e-HKD in the future.

For the tests, Mastercard simulated a full lifecycle of the hypothetical e-HKD, from minting and distribution to spend and redemption within its sandbox environment. In addition, the pilot simulated conditionality to ensure the quality and successful delivery of the physical item purchased using smart contracts.

Mastercard's Multi-Token Network, was introduced in June 2023 as a testbed for developing live pilots of more efficient payment and commerce applications using blockchain technology.

Sandeep Malhotra, executive vice president, products & innovation, Asia Pacific, Mastercard, says: “What’s exciting about this pilot is that it demonstrated the ability to use digital currencies across multiple platforms, as well the potential to utilise existing commercial bank rails to drive overall adoption.

"It also showcased how aspects of the Mastercard Multi-Token Network could potentially be used to solve real-world pain points. In this case, we explored the safe and secure purchase of a physical luxury item with an associated NFT that represents its certificate of authenticity from an unknown party.”

Mastercard was one of 16 participants chosen by the HKMA in May 2023 to take part in the pilot scheme. The programme was designed to investigate e-HKD use cases in six categories: full-fledged payments, programmable payments, offline payments, tokenized deposits, settlement of Web3 transactions and settlement of tokenized assets.

Earlier this week, Mastercard rival Visa disclosed the findings of a pilot test of tokenised deposits for B2B payments with HSBC and Hang Seng Bank as part of trials of an e-HK CBDC programme.