Today, the Federal Reserve’s New York Innovation Center (NYIC) and ten financial institutions shared the results of a proof of concept (PoC) of the Regulated Liability Network (RLN). The trial successfully tested commercial bank deposit tokens and a wholesale central bank digital currency (wCBDC) on a shared DLT infrastructure.
The focus of the tests included U.S. dollar payments domestically as well as cross border.
The big idea behind the Regulated Liability Network is for a single market infrastructure to potentially bring together thousands of banks worldwide and one or more central banks. It’s an idea recently echoed by the Bank for International Settlements’ (BIS) Unified Ledger concept which it described as a ‘game changer’.
Today payments are conducted through messaging, with the banks each updating their ledgers separately. Using distributed ledger technology, the messaging and the settlement are unified reducing the extensive reconciliation process.
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