Leading banks and major credit card companies are reportedly collaborating on a groundbreaking project initiated by UK Finance, an industry body. According to Bloomberg’s latest report, Barclays, Citigroup, Mastercard, and Visa are among the companies joining forces for this venture.
The main objective of the project is to create a tokenized deposits and securities system within the commercial banking sector. This system aims to facilitate faster and easier cross-border transactions while also reducing the occurrence of errors and fraud.
Known as the “Regulated Liability Network,” the UK Finance pilot involves the development of a shared ledger that can track banking payments. With this network, participants can record, transfer, and settle transactions involving central bank money, commercial bank money, and electronic money.
Gilbert Verdian, the CEO of Quant, the company providing blockchain technology for the pilot, explains the significance of programmable payments for banks. He states, “Banks recognize the need for programmable payments in today’s landscape. It’s a significant game changer for them because it allows for more efficient business models that are not constrained by the limitations of the current payment system.”
According to Bloomberg, the results of the pilot project will be published in August. In July, additional participants, including fintech startups and technology companies (which have not been named yet), will be invited to join the pilot. Their role will be to test products related to tokenized commercial bank money.
The project also envisions the platform being used by asset managers to tokenize their funds and for the settlement of mortgages using programmable funds.
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