Mastercard, a leading American payments company, has announced its participation in a groundbreaking trial exploring the use of distributed ledger technology (DLT) for settling transactions. Alongside industry giants like Citi and JPMorgan, Mastercard aims to test a shared-ledger system capable of settling tokenized assets such as wholesale central bank money, US Treasuries, and investment-grade debt securities.

The trial, part of the Regulated Settlement Network (RSN) program, leverages a proof-of-concept (PoC) mechanism to simulate transactions in US dollars. Its primary objective is to assess the viability of settling transactions on a common, regulated platform, thereby expediting cross-border transactions in USD while ensuring compliance with existing regulations. By streamlining settlement processes, the trial seeks to mitigate risks associated with errors and fraud.

Raj Dhamodharan, a senior blockchain executive at Mastercard, emphasized the collaborative effort among companies to explore blockchain's potential in addressing real-world challenges. He expressed optimism that a successful trial could pave the way for innovative solutions and enhanced financial infrastructure, facilitating seamless financial settlements.

The trial boasts participation from a diverse array of financial institutions, including Bancorp, Wells Fargo & Co., Visa Inc., Swift, TD Bank NA, and Zions Bancorp. Approximately ten leading financial services firms in the United States have been selected for this ambitious experiment. Moreover, key industry players such as BNY Mellon, Broadridge, the DTCC, ISDA, and Tassat Group will contribute their expertise to the project.

This initiative builds upon a 12-week test conducted in 2022, known as the Regulated Liability Network (RLN), which focused on domestic interbank payments and cross-border transactions involving US dollar denominations. Managed by the Securities Industry and Financial Markets Association (SIFMA), the new trial aims to advance research involving digital versions of US dollars and securities, reflecting a concerted effort to enhance efficiency and resilience in capital markets.