Mastercard, a prominent player in payment processing and settlements, has joined forces with key US banking institutions, including Citi, JPMorgan, Swift, TD Bank N.A., U.S. Bank, USDF, Wells Fargo, Visa, and Zions Bancorp, to initiate trials aimed at revolutionizing banking settlements through tokenization.

The current landscape witnesses various systems handling securities and assets, leading to disjointed settlement procedures.

To address this, the collaborative effort will leverage a shared-ledger technology known as the Regulated Settlement Network (RSN), where assets are tokenized and settled on a distributed ledger, streamlining the settlement process.

RSN facilitates the collective settlement of tokenized assets such as Treasurys, investment-grade debt instruments, and commercial bank money on a unified platform.

The ongoing trial phase extends from a 12-week pilot initiated in late 2022, which primarily focused on cross-border and domestic dollar payments between banks.

Present 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, emphasized the transformative potential of shared ledger technology in settlements, stating that “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.”