Citi, JPMorgan, Mastercard, Swift, and Deloitte are collaborating on a research project to explore shared ledger technology for multi-asset transactions. The Regulated Settlement Network (RSN) proof-of-concept (PoC) will investigate creating a regulated venue for commercial bank money, wholesale central bank money, and assets like U.S. Treasury bonds and investment-grade debt. The New York Federal Reserve Bank Innovation Centre will serve as an impartial third-party observer.
Major US Financial Institutions Unite to Explore Blockchain-Based Settlement Network
In a groundbreaking move, leading financial institutions Citi, JPMorgan, Mastercard, Swift, and Deloitte have joined forces to launch a comprehensive research project that aims to harness blockchain technology to revolutionize multi-asset transactions denominated in US dollars. This initiative, known as the Regulated Settlement Network (RSN) proof-of-concept (PoC), is set to explore the creation of a fully regulated venue that encompasses commercial bank money, wholesale central bank money, and assets such as U.S. Treasury bonds and investment-grade debt.
The project will be independently observed by the New York Federal Reserve Bank Innovation Centre, ensuring impartial oversight and rigorous analysis. This collaboration underscores the urgent need for financial market infrastructures to adapt to the advent of digital assets within well-defined regulatory frameworks.
Commenting on the significance of this undertaking, Debopama Sen, Citi's Global Head of Payments, expressed the company's enthusiasm to investigate the transformative potential of this initiative. As the digital economy continues to evolve, such innovations are crucial for the modernization and efficiency of financial services.
The RSN PoC aligns with the broader debate surrounding central bank digital currencies (CBDCs) in the United States. Despite reservations expressed by Federal Reserve Chair Jerome Powell, CBDCs have emerged as a prominent topic in the upcoming presidential election. Powell's reluctance stems from concerns about the potential for CBDCs to enable government oversight of customer transactions.
Following the completion of the initial phase, participants will have the option to opt out of further involvement. However, the project's overall objective remains to foster consensus on the integration of blockchain technology within the US financial system. The consortium plans to publish its findings upon the conclusion of the partnership.
Raj Dhamodharan, Mastercard's Executive Vice President for Blockchain and Digital Assets, highlighted the immense potential of blockchain-based dollar settlements to facilitate frictionless, 24/7 programmable settlements. The project's administration will be handled by SIFMA, the Securities Industry and Financial Markets Association. Notably, other prominent institutions participating in the RSN PoC include Zions Bancorp, Wells Fargo, Visa, USDF, U.S. Bank, and TD Bank N.A.
This groundbreaking collaboration marks a significant stride towards harnessing the transformative power of blockchain technology and distributed ledger systems to enhance the efficiency, transparency, and accessibility of financial transactions. As the digital economy continues to flourish, the RSN PoC serves as a beacon of innovation and collaboration, paving the way for a secure, interoperable, and inclusive financial infrastructure for the future.
