US Banks Create PoC For Digital Asset Settlement Platform
Some of the most prominent names in the US financial sector are collaborating on a proof of concept for a regulated platform for the settlement of digital assets.
Citi, Mastercard, Wells Fargo, and the New York Fed’s innovation centre are participating in the 12-week study to investigate the viability of the regulated liability network, an interoperable digital money platform (RLN).
The Proof of Concept will test a version of the RLN design that operates exclusively in US dollars, where commercial banks issue simulated digital money or “tokens” representing the deposits of their own customers, and settle through simulated central bank reserves on a multi-entity shared distributed ledger.
Edward Snowden, an exiled whistleblower, tweeted in reaction to the disclosure, “It starts.”
In addition, the research will evaluate the practicality of a programmable digital currency architecture that is potentially expandable to other digital assets, as well as the compatibility of the proposed system with current laws and regulations.
BNY Mellon, HSBC, PNC, TD Bank, Truist, and US Bank are all participating in the trial, which is hosted by Amazon Web Services and using technologies supplied by SETL and Digital Asset.
Following the completion of the experiment, the organisation will announce the findings of the pilot programme, stressing that participants are not compelled to engage in future projects.
“This project will be conducted in a test environment and only use simulated data,” the group notes. “It is not intended to advance any specific policy outcome, nor is it intended to signal that the Federal Reserve will make any imminent decisions about the appropriateness of issuing a retail or wholesale CBDC, nor how one would necessarily be designed.”
The United States would not be the first country to seek the creation of a national digital currency. China has already started development of a digital yuan. In September, Australia advanced its digital dollar pilot project utilising Quorum, an enterprise-grade, private variation of Ethereum.
