The UK’s largest banks have successfully concluded the experimentation phase of a Regulated Liability Network (RLN), highlighting various advantages that a financial market infrastructure for programmable money could offer when operating on a multi-bank shared ledger.
The RLN is envisioned as a unified ‘platform for innovation’ that encompasses various forms of money, including traditional commercial bank deposits and a shared ledger for tokenized deposits. Major banks and financial institutions such as Barclays, Citi, HSBC, Lloyds, Mastercard, NatWest, Nationwide, Santander, Standard Chartered, Virgin Money, and Visa participated in this experimentation phase over the summer.
Throughout their explorations, the participants identified several potential benefits, including a reduction in fraud, enhanced efficiency in the home buying process, and lower costs associated with failed payments in the UK. Moreover, UK Finance suggests that this platform, when integrated with innovations like Open Banking, could deliver significant economic value and drive market innovation. The RLN could also provide emerging firms with a shared access point to effectively engage with established institutions, as well as to improve payment and settlement systems.
Additionally, the participants agree that the UK’s legal and regulatory framework is adaptable enough to support the development of such an innovation platform. Peter Left, head of digital and markets innovation at Lloyds and co-chair of the RLN Project, remarked, “Through our collaboration, we have demonstrated how this platform can facilitate advancements in money and payments that align with shared objectives from both the public and private sectors, while delivering substantial long-term benefits to customers and the industry.”