Major U. S. banks Citigroup, Visa, and JPMorgan are amongst Mastercard’s partners to try out tokenization of distributed ledger technology for banking settlements.
This partnership seeks to facilitate the settlement of different asset classes on a shared ledger system called the Regulated Settlement Network (RSN). RSN allows the collective settlement of tokenized assets such as Treasurys, investment-grade debt instruments, and commercial bank money.
Currently, different systems manage securities like investment-grade debt and assets from commercial banks. RSN will convert these various assets into tokens and settle them on a single distributed ledger platform, enhancing the efficiency and security of the settlement processes.
Expansion of Pilot Phase and Project Goals
The ongoing trial phase expands on a 12-week pilot phase initiated in late 2022, which focused on cross-border and domestic dollar payments between banks. The current proof-of-concept (PoC) trials are centered on simulating settlements in U.S. dollars.
According to Mastercard’s statement on May 8, the project aims to increase the efficiency of cross-border settlements while minimizing the chances of error and fraud.
Raj Dhamodharan, head of blockchain and digital assets at Mastercard, emphasized that applying shared ledger technology to dollar settlements could revolutionize market infrastructures, making programmable settlements seamless and operational around the clock.
Key Participants and Contributions
The RSN PoC includes notable additions to the participating institutions: interbank tokenized deposit networks, with the USDF Consortium as a direct participant and the Tassat Group as a contributor. Deloitte provides advisory services, while the Securities Industry and Financial Markets Association is the program manager.
Ten major banking institutions are involved: Citi, JPMorgan, Mastercard, Swift, TD Bank N.A., U.S. Bank, USDF, Wells Fargo, Visa, and Zions Bancorp. Six other participants, including the nonprofit MITRE Corporation, BNY Mellon, Broadridge, the DTCC, ISDA, and Tassat Group, are offering their expertise to the project.
U.S. Senator Chris Murphy (D-Conn.) is calling for legislation to ban prediction markets that allow traders to bet…
The U.S. Internal Revenue Service (IRS) has proposed a new rule that would allow cryptocy brokers to deliver…
Global fintech powerhouse Revolut has filed an application for a U.S. banking license, a move that would allow…
A man accused of stealing tens of millions of dollars in cryptocy from U.S. government…
Intercontinental Exchange (ICE) — the parent company of the New York Stock Exchange — has taken a strategic…
A new study from the Bitcoin Policy Institute (BPI) found that leading artificial intelligence models overwhelmingly favor Bitcoin…