UK Finance, a trade association in the banking and finance industry based in the United Kingdom, has announced the launch of a new experimental phase focused on the U.K. Regulated Liability Network (RLN). Eleven member organizations are participating in this phase.
The purpose of the experiments is to examine technical and legal issues, as well as customer benefits, in three different use cases. The first use case will explore payment-upon-delivery for physical products in order to reduce online fraud. The second use case aims to improve customer transparency in the homebuying process to reduce conveyance fraud. Lastly, the third use case will involve the use of digital money for digital bond settlement.
These experiments will align with Project Rosalind, a collaborative effort between the Bank for International Settlements and the Bank of England, which concluded in June. Project Rosalind focused on studying the use of application programming interfaces (API) in banks’ interactions with central bank digital currency (CBDC). The functionality of the U.K. RLN will be examined in a technical sandbox.
The results of these experiments are expected to be published this summer. In September, UK Finance released the results of its RLN experimentation during the discovery phase.
Several major financial institutions are participating in the experimentation, including Barclays, Citi, HSBC, Lloyds Banking Group, Mastercard, NatWest, Nationwide, Santander, Standard Chartered, Virgin Money, and Visa.
The RLN was introduced in November 2022 and is focused on placing assets and liabilities on the same ledger. Its main goal is to promote interoperability between regulated forms of money using blockchain technology. Peter Left, the head of digital and markets innovation at Lloyds Banking Group, expressed his thoughts on the RLN in a statement.
In July, the Federal Reserve Bank of New York Innovation Center, the SWIFT global messaging service, and nine large financial institutions successfully completed a proof-of-concept for exchanging and settling commercial bank deposit tokens and central bank liabilities using a simulated United States CBDC. Some of the participants in this proof-of-concept, such as Citi, HSBC, and Mastercard, are also taking part in the UK RLN experimentation.
Magazine:
How the digital yuan could change the world… for better or worse.