The UK’s largest banks have completed the experimental phase of a regulated liability network, claiming that the financial market infrastructure for programmable money running on a shared ledger across multiple banks could bring a range of benefits.
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The UK RLN is intended to be a common “platform for innovation” for multiple forms of money, including existing commercial bank deposits and a common ledger for tokenized commercial bank deposits.
Barclays, Citi, HSBC, Lloyds, Mastercard, NatWest, Nationwide, Santander, Standard Chartered, Virgin Money and Visa all took part in the experimentation phase over the summer.
Numerous potential benefits were discovered in the use cases examined, including reducing fraud, improving efficiency in the home buying process and reducing the cost of failed payments in the UK.
Additionally, UK Finance says such a platform could create economic value and support innovation in the market in collaboration with things like open banking. The RLN could also provide new firms with a common access point to allow them to interface with established institutions and improve payment and settlement systems.
Participants also concluded that the UK legal and regulatory framework is sufficiently flexible to support the implementation of a “platform for innovation”.
Peter Left, head of digital and market innovation at Lloyds and co-chair of the RLN project, said: “In our partnership, we have shown how this platform supports developments in money and payments that are aligned to shared public and private sector goals “In addition, it offers clear and long-term customer and industry benefits.”