Mastercard is setting up a testbed, dubbed the Multi-Token Network (MTN), which will begin by exploring tokenized bank deposits, and which will be available in beta mode this summer in the U.K.

Raj Dhamodharan, head of crypto and blockchain at Mastercard, said a number of banks and financial institutions are being invited to participate, and the MTN initiative will move on to embrace central bank digital currencies and regulated stablecoins in due course.

There have been a number of pilots and projects around the world involving different flavors of tokenized cash and associated applications, not to mention JPMorgan’s internal wholesale cash token, JPM Coin.

“What powers the global economy today is regulated money in the banks,” Dhamodharan said in an interview with CoinDesk. “So we’re starting with making tokenized bank deposits, so the unit of money in a bank account is a digital asset on the blockchain, bringing the same level of programmability to those as you find with digital currency in the crypto ecosystem.”

The first types of applications and use cases Mastercard intends to drive forward with tokenized bank money dovetails nicely with Mastercard Crypto Credentials, a blockchain analytics application announced in April, to ensure transactions are compliant with things like anti-money laundering (AML) regulations.

“Let’s say a bank in the UK has this tokenized form of bank deposit; and let's say another bank in Singapore also has a tokenized form of deposits,” Dhamodharan said. “You can see this being exchanged one for the other, also known as cross border transfer of value, which traditionally had a lot of issues in terms of being able to move in a fast and flexible way.”

An MTN Innovation Sprint, which will take place in London this summer, where selected teams will receive access to MTN’s capabilities to develop promising use cases powered by tokenized deposits and digital assets, Dhamodharan said.