The New York Federal Reserve, alongside prominent banks and payment firms, has concluded an extensive 12-week proof-of-concept test of the Regulated Liability Network (RLN). This cutting-edge system utilizes shared ledger technology to provide programmability to regulated money.
The working group, which included BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist Bank, U.S. Bank, and Wells Fargo, meticulously examined the performance of a dollar-based wholesale central bank digital currency (CBDC) across various use cases. Their collective efforts marked a significant step forward in reshaping the financial landscape.
The Federal Reserve New York Innovation Center played a vital role in the test, specifically focusing on the simulated operation of tokenized central bank deposits as a settlement asset. However, it is important to note that their participation was not intended to sway any specific policy outcome or imply imminent decisions regarding the appropriateness or design of tokenized central bank deposits or wholesale CBDCs, as clarified in the released report.
This successful test of the RLN showcases the potential of shared ledger technology in revolutionizing the financial sector. With this breakthrough, financial institutions can explore new avenues of near real-time dollar payments and cross-border settlements, bringing unparalleled efficiency and convenience to transactions. The successful proof-of-concept brings us closer to integrating programmable digital currencies, paving the way for transformative possibilities in finance.
