Mastercard Collaborates with Major US Banks for Tokenized Settlement Trials.
There are 10 participant banking giants: Citi, JPMorgan, Mastercard, Swift, TD Bank N.A., U.S. Bank, USDF, Wells Fargo, Visa and Zions Bancorp.
Six more project participants will offer their subject-matter expertise, including the nonprofit MITRE Corporation, BNY Mellon, Broadridge, the DTCC, ISDA and Tassat Group.
Mastercard, a leading payment processing and settlement firm, has partnered with prominent banking institutions like Citigroup, Visa, and JPMorgan in the United States to explore distributed ledger technology for banking settlements via tokenization.
Partnership Objective: The collaboration aims to assess the effectiveness of the Regulated Settlement Network (RSN), a shared ledger platform. RSN facilitates collective settlement of tokenized assets such as Treasurys and investment-grade debt instruments.
Streamlining Settlements: Currently, different systems manage securities and assets. RSN enables the conversion of various assets into tokens for settlement on a single distributed ledger platform.
Trial Expansion: Building on a 12-week pilot phase, the ongoing trials focus on simulating settlements in the US dollar, expanding the scope beyond cross-border and domestic payments.
Efficiency and Security: Mastercard emphasizes enhancing the efficiency of cross-border settlements while reducing errors and fraud risks through shared ledger technology.
Future Market Infrastructures: Raj Dhamodharan, Mastercard's head of blockchain and digital assets, foresees programmable settlements operating 24/7 and frictionlessly with shared ledger technology.
This collaboration signifies a significant step toward innovating settlement processes within the banking sector, potentially revolutionizing market infrastructures.
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