Mastercard, a leading payment technology company, has joined forces with prominent US banks to pilot shared ledger technology. This collaboration aims to enhance the efficiency and speed of cross-border transactions by facilitating consensus on tokenized assets, which include commercial bank money, Treasury securities and investable debt securities.

The initiative, known as the Regulated Settlement Network proof of concept, will simulate US dollar transactions. According to Mastercard, the ultimate objective is to minimize risks associated with errors and fraud while boosting the efficiency of cross-border transactions.

The introduction of ledger technology has the potential to transform the current financial landscape. Presently, assets like commercial bank money and investment-grade debt securities operate on separate systems. However, by converting these assets into tokens on a distributed ledger technology, consensus processes can be unified on a single platform.

This trial builds upon a previous 12-week test initiated in late 2022, focusing on domestic and cross-border payments in US dollars among banks. Key participants in the trial include Citigroup, JPMorgan, Visa, Swift and other major players in the finance sector, along with institutions like Bank of New York Mellon and International Swaps and Derivatives Association contributing their expertise.

Meanwhile, major US banks are seeking assistance from the Securities and Exchange Commission (SEC) to participate in the recently approved spot Bitcoin ETF market. Leading banking associations, including the Bank Policy Institute and the American Bankers Association, have requested targeted amendments in Staff Accounting Bulletin No. 121. This move reflects the growing interest in the digital asset space and the desire for greater clarity and regulatory guidance.