Originally published on: September 17, 2024
The UK finance industry, which processes a whopping $14.5 trillion in payments annually, may be on the brink of major transformation thanks to blockchain technology, according to UK Finance, the country’s finance trade body.
In a recent announcement on Sept. 17, UK Finance revealed the promising results of the experimental phase of the Regulated Liability Network (RLN), a blockchain-based ledger designed for central bank digital currencies (CBDC) and tokenized assets.
The RLN has the potential to drive innovation in the industry by introducing features like programmable payments, reducing fraud, and cutting the costs associated with failed payments.
With 11 major banks participating in the experiments, UK Finance is now calling for further collaboration with regulators and public bodies to advance the development of the RLN.
According to Jana Mackintosh, UK Finance’s managing director of payments, establishing a partnership between the private sector and regulators is crucial to drive investments and ensure successful implementation of the RLN.
Utilizing distributed ledger technology (DLT), the RLN aims to streamline the processing of the $14.5 trillion worth of payments in the UK by enabling banks to record, transfer, and settle funds seamlessly. Additionally, the ledger allows for the tokenization and programming of payments and settlements, as well as the locking and unlocking of funds.
Results from the experiments suggest that the RLN could provide new firms with a central point of access to interface with established institutions, enhancing payment and settlement systems significantly.
Moreover, UK Finance believes that the RLN aligns with the goals outlined in a recent Bank of England discussion paper, emphasizing the importance of innovating while maintaining the integrity of the financial system.
The trade group conducted the experiments in collaboration with leading banks such as Barclays, Citi, HSBC, Lloyds, and others, signaling strong industry support for the potential benefits of blockchain technology in the UK finance sector.
Don’t miss: Discover How UK Cannabis Millionaires Are Leveraging Crypto for ‘Deals on Wheels’
In conclusion, blockchain technology could be the key to unlocking a new era of efficiency and innovation in the UK’s multi-trillion-dollar payments sector.
