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"The Regulated Liability Network (RLN) is a contribution to the global debate on the future of money offered by a group of industry participants. It explores the technical, legal and business characteristics necessary to provide on-chain, 24*7 programmable, final settlement in sovereign currencies, consisting of the liabilities of both public and private regulated financial institutions. These activities could enable a more functionally rich financial system that is compliant with all existing laws and regulations."

The Regulated Liability Network (RLN) completed its proof-of-concept phase on 6 July, proving it can achieve legal instant dollar settlement anywhere in the world. Even as a dollar settlement network, it goes further than wholesale CBDC projects, which are essentially tokenized versions of 24/7 real-time gross settlement systems, because the RLN would include commercial bank money as well as central bank money. Enabling 24/7 cross-border dollar settlement anywhere in the world would drastically improve the payments landscape, reducing risks and improving transaction speed, freeing up liquidity to be better used elsewhere. This would help to cement the dollar's status as the preferred currency for international trade and foreign exchange reserves. Multi-currency CBDC platforms like mBridge are springing up, seeking to give members a means of transacting locally without using dollars. However, with a global 24/7 dollar settlement system in place, there might be less demand for such systems.

The Governor of the Banque de France, proposed a pan European DLT infrastructure. It would support CBDC and tokenised bank deposits to settle transactions for DLT-based tokenized assets on the same network. It acknowledged the concept is echoed in the BIS's recent paper on a 'game changing' Unified Ledger and the IMF's XC concept for cross border payments. https://www.banque-france.fr/en/intervention/regulation-and-innovation-yin-and-yang-financial-sector

The Federal Reserve Bank of New York's New York Innovation Center (NYIC), in collaboration with members of the U.S. financial services sector, published the findings of a proof of concept (PoC) that explored the feasibility of an interoperable network for wholesale payments operating on a shared multi-entity distributed ledger. The research project, undertaken jointly with private sector organizations, experimented with the concept of a regulated liability network (RLN), a theoretical payment infrastructure designed to support the exchange and settlement of regulated digital assets. The experiment successfully simulated both the domestic and cross-border scenarios, identifying shared ledger technology as a potential solution to support payment innovation.

"Many types of so-called stablecoins have tried to meet the market's demands for digital money, only to go wobbly. Instead, the future of online payments lies in commercial bank deposit tokens, which can and should be issued within the current two-tiered monetary system and work in tandem with central bank digital currencies."

JP Morgan is participating in the Regulated Liability Network (RLN). Earlier in September 2023, the UK arm of the RLN shared the findings of its latest work without mentioning the participants. The network aims to bring together banks and central banks to support different types of digital currency on the same network. That includes central bank digital currency (CBDC), deposit tokens and regulated stablecoins. In July the US RLN published a report involving several other U.S. banks, the New York Federal Reserve's innovation arm and Mastercard. The premise that underpins the RLN is interoperability so that banks don't need to use the same type of blockchain to transfer tokens between them.

Citibank launched two "Citi Token Services" digital asset solutions that target institutions. One is a pilot for blockchain-based tokenized deposits, enabling organizations to move money between Citi branches worldwide and 24/7. The other is a trade application that uses smart contracts to trigger instant payments using tokenized deposits. Citi Token Services is separate, but complements the Citibank-founded Regulated Liability Network (RLN), a multi bank collaboration for digital assets, tokenized deposits and CBDCs. https://www.citigroup.com/global/news/press-release/2023/citi-develops-new-digital-asset-capabilities-for-institutional-clients

The New York Fed's Innovation Center (NYIC) is participating in a proof-of-concept project along with members of the private sector to explore the feasibility of an interoperable network of digital central bank liabilities and commercial bank digital money using distributed ledger technology. In a 12-week proof-of-concept project-the Regulated Liability Network U.S. Pilot-the NYIC will experiment with the concept of a regulated liability network (RLN). RLN is a concept for a financial market infrastructure (FMI) facilitating digital asset transactions that connect deposits held at regulated financial institutions using distributed ledger technology. The proof-of-concept will build a prototype for a distributed ledger-based network and test the feasibility of payments between financial institutions using tokenized regulated liabilities on the RLN. The project will be conducted in a test environment and only use simulated data. Participants include BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, U.S. Bank and Wells Fargo. Swift, the global financial messaging service provider, is supporting interoperability across the international financial ecosystem.

The U.S. Securities Industry and Financial Markets Association (SIFMA) will manage a distributed ledger technology (DLT) proof of concept (PoC) involving tokenized deposits, wholesale central bank money, U.S. Treasuries and other tokenized assets on a shared ledger. The goal is to test settlement on a common regulated venue under existing laws by simulating USD delivery versus payment transactions. This will build on a 2023 initiative involving several of the same institutions for the similarly named Regulated Liability Network (RLN).

R3 published a short primer on how Regulated Liability Network (RLN) tokens would work within the structure of the R3 digital currency sandbox. It first describes the proposed technical architecture of the RLN along with where it sits within the existing sandbox. It then look into the specifics of how issuance and payment operations would work were RLN tokens to be issued in a Corda environment.

UK Finance announced work on a new UK Regulated Liability Network (RLN) experimentation phase with eleven of its members. The UK RLN is envisaged as a common "platform for innovation" across multiple forms of money, including existing commercial bank deposits and a shared ledger for tokenized commercial bank deposits. It will focus on three use cases; payment-upon-delivery for a physical product, the process of buying a home, and digital bond settlement. The experimentation phase will run until summer 2024 and will cover customer and business benefits, technical feasibility via proofs of concept in a technology sandbox, and the legal framework.

UK Finance released the results of the experimentation phase of the Regulated Liability Network (RLN) which explored the potential for tokenized deposits and programmability among eleven financial institutions. The overall conclusion was the RLN provides a viable innovation platform, and the next step is to engage with regulators. Five use cases were trialed, ranging from buying a home to the settlement of a tokenized bond, finding significant benefits and exploring various revenue models. It found 40 specific business benefits grouped into five higher level ones; (i) greater settlement efficiency, (ii) the ability to address authorized push payment fraud, (iii) simplifying customer journeys, (iv) reducing the cost of failed payments and (v) greater payment efficiencies. https://www.ukfinance.org.uk/policy-and-guidance/reports-and-publications/rln-reports-2024

The Securities Industry and Financial Markets Association (SIFMA) published the results of Regulated Settlement Network (RSN) proof-of-concept that explored the possibilities for shared ledger-based digital settlement using U.S. Treasury securities and tokenized cash. It found that multi-asset and cross-network settlement could be enhanced through a shared-ledger financial market infrastructure (FMI) that contains tokenized securities, central bank deposits, and commercial bank deposits where each institution operates its own partition. The network enabled a common settlement infrastructure that is 24/7, programmable, and offered precise settlement capabilities to allow financial institutions to optimize their collateral and liquidity positions. At the same time, the network alleviated challenges such as market fragmentation and uncertainty throughout the settlement process.