JPMorgan and Other Major U.S. Financial Institutions Collaborate on Blockchain Settlement System
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In a groundbreaking initiative, the largest financial institutions in the United States are joining forces to explore a chain settlement system for tokenized money and assets. The Securities Industry and Financial Markets Association (SIFMA) announced that members of the regulated U.S. financial sector have launched a proof of concept (PoC) for the Regulated Settlement Network (RSN). The aim is to investigate the feasibility of a shared ledger that settles tokenized commercial bank money, central bank wholesale money, U.S. Treasury securities, and other tokenized assets.
Key players in the program include Citi, JP Morgan, Mastercard, Swift, TD Bank NA, US Bank, USDF, Wells Fargo, Visa, and Zions Bancorp. Deloitte, a leading accounting firm, will provide consultancy services, with two other undisclosed vendors offering technological infrastructure and legal analysis. SIFMA has been appointed as the project manager for the program. The RSN PoC intends to be an “interoperable network for multi-asset transactions aiming to operate on a programmable shared ledger 24/7.”
Raj Dhamodharan, Executive Vice President of Blockchain and Digital Assets at Mastercard, stated, “As blockchain technology continues to mature, it will be crucial for public and private organizations to closely partner to explore how it can be applied to solve real-world problems and improve efficiency. Applying shared ledger technology to dollar settlements could unlock the next generation of market infrastructures – where programmable settlements occur 24/7 without friction.”
Some industry leaders in the cryptocurrency sector have predicted the adoption of blockchain and tokenized transactions by traditional financial institutions. Sergey Nazarov, the creator of Chainlink (LINK), recently remarked that a transition was underway, with the legacy financial system migrating its infrastructure to blockchain and smart contracts, powered by oracle networks.
“After spending the past few months visiting and speaking with many of the largest central banks, commercial banks, and financial market infrastructures in the world’s major financial centers such as New York, London, Sydney, Singapore, Hong Kong, Riyadh, and now Dubai/Abu Dhabi, it is now clear to me that the transition of the global financial system to the blockchain/smart contract format, enabled by Oracle networks, is well underway and, in my opinion, inevitable.”
