Traditional financial firms are finally catching up with the crypto world. The Regulated Liability Network (RLN), an interoperable digital currency platform, is being launched by members of the American banking community as a proof of concept (PoC) initiative.
According to the press release, central banks, commercial banks of all sizes, and regulated non-banks would all participate in the proposed platform, which would use distributed ledger technology to foster innovation possibilities to enhance financial settlements.
Commercial banks will issue fictional tokens to represent the deposit accounts for their clients during a 12-week PoC. This trial includes a version of the RLN technology that runs only in U.S. dollars and settles through fictitious central bank reserves over a shared ledger system used by many institutions.
PoC will also test “the feasibility of a programmable digital money design” that could extend to other digital assets and whether or not this system would function under existing laws and regulations.
Additionally, in the press release, the regulatory framework, scope, tokens, industry participation, results, and future goals are all cited as other important features of the proof-of-concept.
Other Participants In This PoC
The New York Innovation Center (NYIC), a division of the Federal Reserve Bank of New York, is participating in this PoC with members of the American banking and payments community.
The press release asserts that:
The NYIC collaborates with the private and public sectors on innovations aimed at enhancing the functioning of the global financial system and the ability of central banks to carry out their missions.
Besides the NYIC, there are many other partners in this project, including banks and payment processors such as Bank of New York Mellon Corp., Citigroup Inc., HSBC Holdings Plc., Mastercard Inc., PNC Financial Services Group Inc., T.D. Bank Group Ltd., Truist Inc., U.S. Bancorp, and Wells Fargo & Co.
Moreover, SETL Technology Ltd., powered by Amazon Web Services Inc., provides the technology for the project, while Deloitte (which provides legal services) will advise on organizational aspects.
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