It recently came to light that several of the largest players in the traditional finance sector, including Citigroup and Wells Fargo, are joining together. The several named entities are coming together with the Federal Reserve Bank of New York to test a digital money platform that has been in development. The name of the platform is the Regulated Liability Network, or RLN.
This latest blockchain news comes in the wake of FTX, one of the largest players and ecosystems in the entire digital assets market setting off a cascade of liquidity crises, bankruptcies and more after filing chapter 11 bankruptcy on November 11.
Details Into The Regulated Liability Network And Program
The Regulated Liability Network (RLN) is set to be used as the digital network on which a 12-week pilot program will be used to explore digital payments issued between the Fed and institutions. Specifically, the 12-week program will look into how the RLN could potentially enhance how central bank money is settled between the institutions.
It is a proof-of-concept pilot in which it has been reported that banks will issue tokens representing customer deposits, settled on a central bank reserve, on a shared distributed ledger, representing the main component of the blockchain concept. It has been documented that the program will be conducted solely in a testing environment, using only simulated data.
Mastercard, Citigroup, HSBC, BNY Mellon and Wells Fargo, have been named as leading firms teamed together with other giants in the financial sector along with the leadership of the Federal Reserve Bank of New York to head up the pilot.
A Recent Rough Patch For The Blockchain And Crypto Industries
The crypto market sector has been all but crippled and many of the most revered and respected experts are calling for some form of regulation at this juncture. Recent events have only worsened since the nearly $60 billion dollar crash of the Terra Luna ecosystem in May, and several incidents that have all occurred prior to the FTX catastrophe.
It is no surprise then to most who have stayed up to date with recent news, that the entire crypto market has come under heavy regulatory fire as of late. The scrutiny that has only been amplified by the gross mismanagement of investors’ funds by FTX, and individuals managing the company’s operations, which is becoming more obvious and apparent as the books are being opened in light of its impending chapter 11.
A Good Time For Good News In Crypto And Digital Currencies
There is perhaps no better time for good news concerning the digital currency and blockchain industry. It is no secret that large financial institutions and banks have been researching and actively exploring the potential of blockchain technology and digital payment networks powered by them, for some time now. However, the active leadership and involvement of the Federal Reserve Bank of New York in an officially piloted program should give this initiative more reason to be watched closely.
There could be future developments in the area of government-regulated digital payments, which ignites further thoughts and talks of the potential for wholesale CBDCs between the Fed and commercial institutions in the near future.
Retail CBDCs, involving fiat transfer in the digital space between banks and individuals, have been in development for some time. Countries like China, India, France, Nigeria and others have already been documented as actively exploring the concept in real time. Some are saying this could all lead to more integration between the traditional financial sector and the digital economy on higher levels, especially as regulatory standards become clearer, as they are expected to.