Banking News

Digital Asset, SETL partner for Regulated Liability Network blockchain protocol

dlt blockchain network

Last year Citi’s Tony Mclaughlin outlined his vision of the Regulated Liability Network, an enterprise blockchain network spanning central banks, commercial banks and other institutions to enable the regulated sector to fight the “digital money format war”. Today Digital Asset and SETL announced they are collaborating to develop a new blockchain protocol that will underpin this network.

The purpose of the RLN is to enable institutions to achieve true atomic settlement between tokenized assets, whether that’s currencies for cross border payment or settlement of tokenized securities. And that settlement – for both central and commercial banks – will be on a single network. That’s not to say the RLN will be an island, but the goal is to develop one network.

This collaboration is far more than an agreement to use each other’s technology. Each will contribute their expertise to develop a new protocol.

Both tech startups already have fairly mature technology stacks and strong relationships with financial institutions. In Digital Asset’s case, its clients include numerous stock exchanges such as ASXDeutsche Boërse, and HKEXSETL is known for French fund management platform IZNES and a DLT central depositary solution ID2S.

The companies have a shared client in SGX, which has used DAML for bond issuance. SGX’s bond joint venture Marketnode uses SETL’s blockchain technology. And they have a common investor in Citi, a significant SETL shareholder.

Both SETL and Digital Asset have their own blockchain, and Digital Asset has extensively partnered with VMWare and its blockchain. We asked SETL Chief Engineer Anthony Culligan if a decision had been made about which blockchain would underpin the solution. “There are different areas where we both excel,” he said. “We haven’t made that decision yet, and if we can think of a better way, we will.”

Culligan outlined two of the areas where each stands out. Late last year, SETL did work to elevate its scalability from 30,000 transactions per second (TPS) to one million. He believes that work is groundbreaking and could be a key contribution to the RLN protocol. From Digital Asset’s side, Culligan said, “the technology behind (smart contract language) DAML in terms of the way that it manages relationships between parties and the way it defines relationships between parties,” would likely be viewed as groundbreaking.

SETL’s Chief Engineer also commented that there had been a steady stream of interest from numerous banks.

Yuval Rooz, CEO of Digital Asset said in a statement, “Interoperability is a major goal for us and by working with SETL we will produce a world class network with the ability to connect and communicate across all existing clients’ solutions to serve the regulated community.”


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