In July, the Federal Reserve Bank of New York’s New York Innovation Centre (NYIC) announced the successful conclusion of an experiment for many banks to make wholesale dollar payments in both central bank digital currency and in digital commercial bank money on a shared multi-entity distributed ledger.
This is the regulated liability network (RLN) whose participants, alongside the Fed’s NYIC, also include BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, Swift, TD Bank, Truist, U.S. Bank and Wells Fargo.
After years of theorizing about interoperability across a network of innovative wholesale payments rails, banks are starting to see what a universal distributed ledger might look like.
From a central banking perspective, the proof of concept was conducive to exploring tokenized regulated deposits
“From a central banking perspective, the proof of concept was conducive to exploring tokenized regulated deposits and understanding the potential functional benefits of central bank and commercial bank digital money operating together on a shared ledger,” said Per von Zelowitz, director of the NYIC.
Blockchain proponents have been shouting for so long now about those benefits – faster speed, lower cost, greater accessibility, settlement finality – that it is almost surprising that most banks are still only experimenting in limited test environments, with simulated data and liabilities.
But
