A panel at today’s Citi Digital Money Symposium explored the Regulated Liability Network (RLN), a big idea in which central bank money could coexist on the same shared network as bank deposit tokens and possibly regulated stablecoins. While the RLN is not an exclusively Citi project, it was conceived by Citi’s Tony McLaughlin. At today’s event, he observed that the dawn of digital currency means that ‘messaging is done’ when it comes to payments.
McLaughlin started by clarifying that today’s payments involve messaging and settlement. He observed that people often incorrectly blame SWIFT for slow cross border payments, but it is rarely SWIFT’s fault. SWIFT is purely a messaging system with banks doing the settlement, and the delays relate to the settlement, not the messaging. The Regulated Liability Network is quite different because it aims to be a settlement layer.
“The blockchain community would have you believe that when a transaction takes place on a blockchain, settlement has been achieved. It has not been achieved,” said McLaughlin. “Because settlement is a legal construct, it’s not a technological construct.” To address DvP (delivery versus payment) and enable the settlement of tokenized securities, you need a construct that can achieve settlement and supports multiple currencies and assets. “That’s an infrastructure that does not currently exist today,” he added.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
