Mastercard teams up with leading US banks to test shared-ledger technology, to streamline tokenized asset settlement.
Mastercard Inc. and several of the largest banks in the United States have initiated an innovative collaboration to test shared-ledger technology to facilitate the common settlement of tokenized assets.
Commercial bank money, Treasury securities, and investment-grade debt securities are among these assets.
The objective of the Regulated Settlement Network proof-of-concept is to attempt to simulate dollar transactions.
Mastercard asserts that the fundamental objective is to optimize international transactions’ velocity and effectiveness while mitigating errors and fraud risks.
Transformative Potential of Ledger Technology
The potential implementation of ledger technology can significantly transform the existing framework of financial transactions.
Currently, investment-grade debt and commercial bank money, considered assets, function on distinct systems.
However, settlement procedures could be conducted on a unified platform by transforming these assets into tokens that operate on a decentralized ledger.
A prior 12-week trial that commenced in late 2022 and concentrated on domestic interbank and cross-border dollar payments serves as the foundation for this investigation.
Prominent trial participants comprise Citigroup Inc., JPMorgan Chase & Co., Visa Inc., Swift, and other significant financial industry entities.
Further bolstering the trial’s prospects will be the contributions of reputable organizations, including the International Swaps and Derivatives Association and the Bank of New York Mellon Corp.
While financial institutions across the globe have been conducting trials of distributed ledgers for tokenized transactions, the present trial needs to ensure that these ledgers will be applicable in the marketplace.
US Banks Request SEC Support for Bitcoin ETF Participation
Several prominent American banks are approaching the Securities and Exchange Commission (SEC) to influence its position on the recently authorized spot Bitcoin ETFs market.
Prominent banking organizations, including the American Bankers Association (ABA) and the Bank Policy Institute (BPI), have requested targeted amendments to Staff Accounting Bulletin No. 121 (SAB 121) in a joint letter to SEC Chair Gary Gensler.
Simultaneously, the banking sector has faced significant challenges, as evidenced by the official closure of Republic First Bank on April 26th, 2024.
This closure signifies the Republic First Bank’s second failure; the first occurred in 2023.
The occurrence underscores persistent issues in the sector and stresses the necessity for regulatory modifications to rectify systemic weaknesses.