We are pleased to highlight the recent publication of UK Finance’s report on the UK Regulated Liability Network (RLN) project. This report encapsulates the experimentation phase conducted in collaboration with key industry players including Barclays, Citi, HSBC, Lloyds Banking Group, Mastercard, NatWest, Nationwide, Santander, Standard Chartered, Virgin Money, and Visa. This innovative financial market infrastructure seeks to offer new capabilities for payments and settlement, incorporating tokenization and programmability.
In this project, Quant and R3, alongside DXC Technology and Coadjute, were chosen as technology partners to explore various use cases and develop a multi-issuer DLT-based Tokenization Platform. The effort resulted in a comprehensive API enabling interaction with multiple forms of money, alongside an Orchestration Layer that connected the Tokenization Platform to various ledgers. This seamless integration also interacted with existing systems such as Open Banking, Project Rosalind, and a simulated RTGS.
During the experimentation phase, Quant, R3, and other participants reviewed several technical, legal, and business case considerations, reaching several key conclusions:
- Economic Value & Market Innovation: The platform, when integrated with initiatives like Open Banking, has the potential to deliver economic value and foster innovation in financial markets.
- New Functionalities: It demonstrated the capability to provide programmable payments and the ability to lock/unlock funds across diverse use cases.
- A Common Access Point: New and innovative firms could benefit from a single, standard access point to interface with established institutions and enhanced payment systems.
- Regulatory Flexibility: The UK’s legal and regulatory framework is adaptable enough to support the implementation of an RLN.
R3 leveraged its expertise in managing complex projects for regulated markets, providing critical distributed ledger technology through its open permissioned DLT platform, Corda. Quant enabled programmability and interoperability across different forms of money by implementing the orchestration and API layer with their Overledger platform.
Jana Mackintosh, Managing Director of Payments, Innovation and Operational Resilience at UK Finance, emphasised the scale of the UK payment system, which processes over £11 trillion in payments annually, stating: “The success of the RLN experiment shows the potential of technology to transform the customer experience and deliver economic value and benefits for society. The private sector wants to invest in the future of commercial bank money but needs a partnership with regulators to do so.”
Gilbert Verdian, Founder and CEO of Quant, added: “The RLN isn’t just about enhancing the efficiency of our current payment infrastructure; it’s about creating different forms of money that will transform the way value and assets are moved and managed. Programmability brings new functionality across payments and settlement that are inconceivable under the current system.”
Martin Hargreaves, Chief Product Officer at Quant, noted the importance of maintaining the UK’s leadership in payments innovation, saying: “This latest phase of the RLN demonstrates the value that programmable payments can bring in levelling up UK banking ahead of other countries.”
R3’s Chief Commercial Officer, Kate Karimson, praised the collaborative nature of the project, asserting that it “demonstrates our advanced technology implementation capability” and sets out a roadmap for the UK economy to leverage the benefits of tokenization.
The RLN experimentation phase underscores the transformative potential of programmable payments and sets the foundation for future innovations in the UK’s financial markets. The next steps will involve further collaboration with regulators and the broader industry to turn these technological advancements into concrete benefits for society and the economy.
