UK Finance Explores Blockchain-Based Ledger For Payments And Settlements
According to Cointelegraph, a blockchain-based ledger for payments and settlements could significantly benefit the United Kingdom’s finance industry, which processes $14.5 trillion worth of payments annually, as stated by the country’s finance trade body, UK Finance.On September 17, UK Finance shared insights following the conclusion of a successful experimental phase of the Regulated Liability Network (RLN), a blockchain-based ledger designed for central bank digital currencies (CBDC) and tokenized assets. The RLN aims to support innovation and introduce new financial functions such as programmable payments. The experimentation phase involved collaboration with 11 banks.UK Finance emphasized the need for further engagement with regulators and other public bodies to develop the RLN, highlighting its potential to reduce fraud and lower the cost of failed payments. The organization noted that the UK’s legal and regulatory framework is sufficiently flexible to support this innovative platform but requires further implementation and regulatory engagement.Jana Mackintosh, UK Finance’s managing director of payments, stated that the private sector is eager to invest in the future of commercial bank money and that a partnership with regulators is crucial for success. The RLN utilizes distributed ledger technology (DLT) and is primarily intended for use by commercial banks to manage the $14.52 trillion (11 trillion British pounds) worth of payments processed annually in the UK.The ledger can accommodate wholesale CBDCs, commercial bank money, and electronic money, allowing entities with access to record, transfer, and settle funds. It also enables the tokenization and programming of payments and settlements, as well as the locking and unlocking of funds.One of the key findings from the experiments was that the RLN could provide new firms with a common point of access, enabling them to interface with established institutions and enhanced payment and settlement systems. UK Finance also claimed that the platform could help achieve objectives set out by a July Bank of England discussion paper, which include maintaining the singleness of money and promoting sustained innovation.The trade group initiated the experiments in April, collaborating with banks such as Barclays, Citi, HSBC, Lloyds, Mastercard, NatWest, Nationwide, Santander, Standard Chartered, Virgin Money, and Visa.