📰 Table Of Contents
Mastercard and U.S. Banks Collaborate on Distributed Ledger Technology
Payments giant Mastercard has teamed up with several leading U.S. banks to explore the potential of new distributed ledger technology for tokenized asset settlement.
Financial Giants Join Forces for Proof-of-Concept
A proof-of-concept (PoC) called the Regulated Settlement Network (RSN) has been announced by financial institutions such as JPMorgan, Citibank, and others. The aim is to leverage shared ledger technology to facilitate smoother cross-border money transfers.
Tokenized Assets in the System
Tokenized assets involved in the project include commercial bank money, wholesale central bank money, and securities like U.S. treasuries and investment-grade debt. These assets typically operate on separate systems within the traditional financial framework.
Testing Environment and Objectives
The RSN PoC will be carried out in a controlled test environment, simulating multi-asset transactions in U.S. dollars. The goal is to identify ways to enhance the efficiency of multi-asset settlements for users of financial instruments denominated in U.S. dollars.
Expansion of the Project
Building on a previous twelve-week PoC conducted by Mastercard in 2022, the current initiative aims to enable multi-asset settlement on a programmable digital ledger.
Participants and Collaborators
In addition to Mastercard and the U.S. banks, other participants in the trial include Visa, Swift, TD Bank N.A., U.S. Bank, USDF, and Wells Fargo. U.S. Bank has also revealed a $14 million investment in Bitcoin ETFs.
Role of the Federal Reserve Bank of New York
The Federal Reserve Bank of New York will act as a technical observer for the project, focusing on understanding how distributed ledger infrastructure can facilitate regulated financial transfers.
The Rise of Tokenized Assets
Tokenization of real-world assets has gained significant attention in mainstream financial circles. Leaders like JPMorgan CEO Jamie Dimon, while skeptical of cryptocurrencies like Bitcoin, acknowledge the potential of blockchain technology.
BlackRock’s introduction of a tokenized asset fund called BUIDL, which attracted $240 million within a week of launch, highlights the growing interest in this space. The fund utilizes blockchain to record share ownership and invests in stable assets like cash, U.S. Treasuries, and repurchase agreements.
Debopama Sen, Global Head of Payments at Citi Services, expressed enthusiasm for the RSN project, emphasizing the potential for more efficient financial transaction settlements through tokenization.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
