Tokenized settlement trials bring together Mastercard and US banking giants

Mastercard, a payment processing and settlement firm, has partnered with major US banks such as Citigroup, Visa, and JPMorgan to test distributed ledger technology in banking settlements. The collaboration aims to test a shared-ledger technology called Regulated Settlement Network (RSN), which allows tokenized assets like Treasuries and investment-grade debt to be settled collectively. Currently, different systems are used for securities and assets, but RSN will enable settlement procedures to occur on a single platform by converting assets into tokens and settling them on a distributed ledger. The current trial phase builds upon a 12-week pilot phase that began in late 2022, which focused on cross-border and domestic dollar payments. The ongoing RSN trials are now simulating settlements in the US dollar. Mastercard stated that the project aims to increase the efficiency of cross-border settlements while reducing the risk of errors and fraud. The participating banking institutions include Citi, JPMorgan, Mastercard, Swift, TD Bank N.A., U.S. Bank, USDF, Wells Fargo, Visa, and Zions Bancorp, with additional expertise provided by six other participants. The project manager will be the Securities Industry and Financial Markets Association.