Mastercard, a leading payment processing and settlement company, has partnered with major US banking institutions
Mastercard, a leading payment processing and settlement company, has partnered with major US banking institutions, including Citi, JPMorgan, Mastercard, Swift, TD Bank N.A., U.S. Bank, USDF, Wells Fargo, Visa, and Zions Bancorp, to conduct trials of banking settlements using tokenization.
Currently, different systems handle securities and assets, leading to fragmented settlement processes. By utilizing a shared-ledger technology called the Regulated Settlement Network (RSN), various assets will be converted into tokens and settled on a distributed ledger, streamlining the settlement procedures. RSN enables the collective settlement of tokenized assets, such as Treasurys, investment-grade debt instruments, and commercial bank money, on a single platform.
The ongoing trial phase builds upon a 12-week pilot that began in late 2022, which initially focused on cross-border and domestic dollar payments between banks. The current proof-of-concept (PoC) trials of RSN specifically simulate settlements in the United States dollar.
Raj Dhamodharan, Head of Blockchain and Digital Assets at Mastercard, highlighted the potential of shared ledger technology for settlements, adding: “the application of shared ledger technology to dollar settlements could unlock the next generation of market infrastructures – where programmable settlements are 24/7 and frictionless.”
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