U.S Banks With NYIC Launch ‘Regulated Liability Network.
Members of the U.S banking and payments community in collaboration with the New York Innovation Center (NYIC) have launched the “Regulated Liability Network” (RLN), a proof-of-concept digital money platform.
The RLN will use distributed ledger technology to create opportunities to improve financial settlements. It will have participation from central banks, commercial banks, and regulated non-banks, including Citi, PNC Bank, BNY Mellon, Swift, Truist, TD Bank, and U.S Bank. Banking officials have been keen about central bank digital currencies (CBDCs) for quite some time now.
The group will run the RLN for 12 weeks and it will only operate in U.S dollars. Simulated digital tokens representing customer deposits will be issued by the participants. It will be settled through simulated central bank reserves on a shared blockchain. The ambitious project includes a regulatory framework aligned with existing regulations like know your customer (KYC) and anti-money laundering requirements. It will also look into the feasibility of extending the platform to support other digital assets, like stablecoins.
Moreover, the group will publicize the pilot program’s results following the project’s conclusion. The project will only use simulated data and will be conducted in a test environment. It should be noted that this project is not for the Federal Reserve to make any imminent decisions about the appropriateness of issuing a retail or wholesale CBDC, and not how a CBDC would necessarily be designed.