Quant, HSBC, R3, Visa, among 13 others chosen by UK Finance to join next prototype phase

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UK Finance has unveiled plans for a new phase of experimentation within the UK Regulated Liability Network (RLN), involving eleven of its member institutions.

The RLN initiative aims to establish a versatile ‘platform for innovation’ accommodating various forms of currency, including traditional commercial bank deposits and tokenized equivalents. By fostering collaboration among multiple stakeholders in the financial sector, the RLN seeks to explore advanced payment, transaction, and liability settlement solutions for the digital marketplace of the future.

Participating institutions in this endeavour include Barclays, Citi, HSBC, Lloyds Banking Group, Mastercard, NatWest, Nationwide, Santander, Standard Chartered, Virgin Money, and VISA. Supported by EY and Linklaters, the project benefits from the technical expertise of R3, Quant, DXC, and Coadjute.

The experimentation phase will focus on several key use cases:

  1. Payment-upon-delivery for physical products, aimed at combatting fraud in online marketplaces.
  2. Streamlining the home purchasing process to enhance transparency and mitigate conveyancing fraud.
  3. Facilitating digital bond settlements, connecting digital funds with digital assets.

These use cases will assess the RLN’s ability to accommodate diverse monetary forms, including both traditional and tokenized deposits.

Scheduled to run until the summer of 2024, the experimentation phase will address the following areas:

  • Customer and Business Benefits: Exploring foundational capabilities aligned with Project Rosalind experiments by the Bank of England and the Bank for International Settlements, aimed at developing a digital pound.
  • Technical Feasibility: Conducting a proof of concept via a technology sandbox to evaluate the functional and non-functional requirements of the RLN design, including simulated connections and transactions.
  • Legal Framework: Analysing the application of existing and potential future laws and regulations to the operation of a shared ledger settlement system, including tokenized deposits.

The results of the experimentation phase will be made public following the summer period. UK Finance plans to facilitate engagement opportunities for stakeholders, including innovators, technology companies, and FinTech firms, to participate in the project.

Jana Mackintosh, Managing Director at UK Finance, emphasised the importance of collaborative efforts in designing inclusive digital money solutions to advance the UK’s financial infrastructure.

Representatives from participating institutions also expressed their enthusiasm for the RLN project and its potential to drive innovation and modernisation in the financial sector. They highlighted the benefits of enhanced payment functionality, reduced fraud, and improved customer experiences that could result from the initiative’s success.

​“R3’s shared ledger technology is a great asset to this experimentation phase of work,” said Jana Mackintosh, Managing Director, Payment Innovation and Resilience at UK Finance. “This project is being run to test hypotheses about the envisaged benefits of a UK RLN as a platform-for-innovation, and will be integral to futureproofing and progressing the UK’s financial infrastructure. Quant’s experience developing connectivity and smart contracts will prove invaluable to the UK RLN proof-of-concept as we look to simulate the integration of participants’ existing systems and explore payments programmability that enhances use cases and business flows.”

​“We live in a digital age, in which people and companies expect digital finance to operate globally at speed, with better security and at scale – but our legacy payments and financial infrastructure has not kept up. As the UK seeks a leadership position in financial markets, projects like the RLN highlight the central role that shared ledgers will play in this transition and offer a model we can extend to other markets,” said Gilbert Verdian, our Founder and CEO. “We’re delighted to be a key part of this important initiative which so closely aligns with our company vision: an empowered, interconnected world.”

“The RLN initiative is bringing the industry together to work towards a shared goal – harnessing the benefits of tokenised finance in a manner that is regulated, orderly and interoperable,” said R3 Chief Commercial Officer Kate Karimson. “Being selected to lead and deliver the technology stream for the Experimentation Phase underpinning the UK RLN is a huge milestone for R3, and a testament to our technology when it comes to powering the digitalisation of real-world assets and currencies in complex and highly regulated industries. In the future, the RLN could provide a digital infrastructure that firms across the ecosystem can connect into and innovate further. We’re excited to be part of a truly pioneering initiative that will hopefully inform other future innovations.”

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