The U.K.’s largest banks, members of UK Finance, the trade association for the banking and financial services sector, will test the Regulated Liability Network (RLN).
The U.K. trade association announced that its members will join the testing of the RLN technology. The U.K.’s Regulated Liability Network, in particular, will be tested by the country’s major banks, including Standard Chartered, Citi, HSBC, Barclays, Santander, Lloyds Banking Group, Nationwide, Virgin Money, and NatWest, as well as payment networks Visa and Mastercard. Other British FinTech companies were also invited to participate.
The Regulated Liability Network (RLN) is a technology for tracking and transferring tokenized debt obligations, whose issuers can be various financial institutions. The technology operates on a distributed ledger, supports smart contracts, and integrates protocol modules for interoperability with other financial systems. As a result, the RLN enables transaction accounting across and between systems, and tokenized assets based on it represent a potential alternative to decentralized digital assets such as BTC and central bank digital currencies (CBDC).
The project’s main goal is to develop a prototype of an RLN-based common platform and evaluate its benefits. The project’s tech partners are R3 and Quant, with DXC providing system integration. The project will be coordinated by UK Finance with support from EY and Linklaters.
The project will concentrate on three use cases for the platform:
- Digital bond settlement.
- Payment-upon-delivery for physical products.
- Real estate transactions.
According to the project’s authors, the RLN technology will simplify transactions with digital assets, reduce fraud on online trading platforms and real estate operations, and increase the transparency of property transfer processes. Operations in the real estate market will be provided by DLT company Coadjute.
The testing will last until the summer. A report will be published on the platform’s benefits for clients and the technological and legal aspects of its operation.
It’s noted that the study of the underlying capabilities of the RLN is intended to complement earlier research by the Bank for International Settlements (BIS) and the Bank of England, conducted under Project Rosalind, in the context of the use of an application programming interface (API) for digital pound transactions. The functionality of the British RLN technology will be tested as part of a local tech sandbox.
