Global payment provider Mastercard is collaborating with major US banks to test shared-ledger technology for settling tokenized assets.
Some of the financial institutions include JP Morgan, Citi Group, and Visa. Let’s explore more about this important news for Mastercard.
Mastercard Tests Tokenized Asset Settlement with Major Banks
The partnership between Mastercard and the financial companies will test the use of shared-ledger technology known as the Regulated Settlement Network (RSN). RSN supports the collective settlement of tokenized assets, such as treasury, and funds from commercial banks. These assets currently operate on different platforms.
RSN will ensure these settlement procedures take place on a single platform. It would convert these assets into tokens and settle them on a distributed ledger. Mastercard notes that the goal of this test is to improve cross-border transactions.
Mastercard is joining with financial institutions to test ledger technology that would allow the common settlement of tokenized assets https://t.co/Fv5D1ge1no
— Bloomberg Crypto (@crypto) May 8, 2024
The use of ledger technology could be a game-changer for the financial space. Raj Dhamodharan, Head of Blockchain and Digital Assets at Mastercard, said in a statement that “application of shared ledger technology to dollar settlements could unlock the next generation of market infrastructures—where programmable settlements are 24/7 and frictionless.”
This new trial expands on a previous trial that began in 2022. The previous test focused on payments made in US dollars and cross-border transactions. The new trial has about 10 financial institutions participating in it. Some of them include Wells Fargo, Swift, TD Bank N.A., U.S. Bank, USDF, and Zions Bancorp. The participation of these firms reflects the importance of this project. It also shows the willingness of these financial giants to adapt to the changing digital era.
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