Mastercard Inc. is teaming up with some of the largest US banks to explore shared-ledger technology, enabling the collective settlement of tokenised assets such as commercial-bank funds, Treasury securities, and investment-grade debt, Bloomberg reported. This initiative, dubbed the Regulated Settlement Network proof-of-concept, aims to streamline transactions in US dollars, as announced by Mastercard in a statement on Wednesday. The overarching objective is to enhance the speed and efficiency of cross-border transactions while minimising the risks of errors and fraud. Moreover, the adoption of ledger technology stands to revolutionise conventional financial practices. Presently, various assets like commercial bank funds, central bank reserves, and securities operate on distinct systems. However, by transforming these assets into tokens managed on a distributed ledger, settlement can occur within the same unified system. This trial builds upon a previous 12-week experiment initiated in late 2022, which focused on domestic interbank and cross-border dollar payments. Joining Mastercard in this endeavour are prominent institutions including Citigroup Inc., JPMorgan Chase & Co., US Bancorp, Wells Fargo & Co., Visa Inc., Swift, TD Bank NA, and Zions Bancorp. Additionally, the Bank of New York Mellon Corp. and the International Swaps and Derivatives Association are contributing expertise to the project. The New York Innovation Centre at the Federal Reserve Bank of New York will oversee and study the participants' research and experimentation with tokenised settlement assets. Financial firms worldwide are actively exploring shared ledgers for tokenised transactions. For instance, Mastercard, Barclays Plc, and Citi are part of a new UK pilot announced in April. However, it's important to note that participation in the trial does not necessarily indicate a commitment to commercial deployment by the involved companies.
