MasterCard, CT, JPMorgan, Visa Explore Distributed Ledger Tech

In an effort to harness modern technology, MasterCard, Visa, JPMorgan and Citigroup are setting the stage for a potential revolution in distributed ledger solutions in financial markets.

Financial giants join forces to launch Regulated Settlement Network (RSN).

Distributed ledger technology for multi-asset settlements

RSN plans to combine commercial bank funds with wholesale central bank funds and a variety of securities, US Treasuries and investment-grade debt. By facilitating settlements in US dollars, the project will test the feasibility of a more connected financial ecosystem with distributed ledger technology.

Interestingly, the New York Innovation Center of the Federal Reserve Bank of New York supported this initiative.

RSN's collaborative framework extends beyond simple partnerships. It is a strong effort involving key players such as SWIFT, Deloitte and prominent US banks such as Wells Fargo and TD Bank. Each participant contributes unique expertise in advancing distributed ledger technology in the US financial system.

The previous 12-week trial focused on domestic interbank and cross-border payments. This new chapter builds on that foundation, engaging additional financial institutions and advisory bodies such as the Securities Industry and Financial Markets Association (SIFMA) to ensure a holistic approach to deploying this technology.

Raj Damodharan, executive director of blockchain and digital assets at MasterCard, highlighted the potential impact.

“Applying shared ledger technology to dollar settlements could unlock the next generation of market infrastructure.” Damodharan said.

The RSN initiative aims to simplify the settlement process by integrating different types of funds and securities on one platform. This reduces the risk of errors and fraud and strengthens the financial infrastructure from operational inefficiencies.

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Spending on blockchain solutions is increasing, forecasts suggest that it will reach 19 billion dollars in 2024, the main financial players are involved in this experiment. However, this step is illustrative and does not guarantee progress to commercial deployment.