Major financial institutions such as Citi and JP Morgan, along with others, have successfully completed trials for tokenization settlements.
The financial industry took a significant step forward with the recent Regulated Settlement Network (RSN) trials, led by the Securities Industry and Financial Markets Association (SIFMA). These trials were an extension of last year's Regulated Liability Network trials and involved ten institutions: Citi, J.P. Morgan, Mastercard, Swift, TD Bank N.A., U.S. Bank, USDF, Wells Fargo, Visa, and Zions Bancorp.
The trials aimed to explore the use of a shared Distributed Ledger Technology (DLT) network to settle tokenized transactions, including tokenized commercial bank money and central bank money, as well as tokenized Treasuries and investment grade bonds. This innovative approach could revolutionise the way financial transactions are conducted, offering increased efficiency and security.
In addition to exploring the use of a shared DLT network, the trials also delved into interoperability with external DLT networks. This could pave the way for seamless integration between various financial systems, fostering greater collaboration and efficiency within the industry.
SIFMA acted as the coordinator for the institutions involved, ensuring a smooth and successful execution of the trials. One of the key achievements of the trials was the enablement of delivery versus payment for wholesale transactions on the shared ledger. This feature could significantly reduce risks associated with settlements and enhance overall transactional security.
The Regulated Settlement Network trials mark a significant milestone in the adoption of DLT technology within the financial sector. As the industry continues to evolve, it is expected that such trials will pave the way for wider implementation of DLT technology, leading to more efficient and secure financial transactions.
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