The UK’s biggest banks have completed the experimentation phase of a Regulated Liability Network

The UK’s banks have been conducting experiments involving the Regulated Liability Network (RLN) with the goal of identifying potential benefits for the financial markets. Now, the banks revealed that the experimentation phase is complete, with a number of discovered advantages.

RLN Could Bring Benefits To The UK’s Financial Market

According to the banks, there are numerous benefits that the financial market infrastructure for programmable money operating on a ledger shared among multiple banks can bring. The RLN is generally viewed as a common platform for innovation across many different forms of money.

That includes existing commercial bank deposits, but also a shared ledger for tokenized deposits.

The banks participating in the experimentation include all of the UK’s major financial institutions, such as NatWest, Barclays, HSBC, Lloyds, Citi, Mastercard, Nationwide, Standard Chartered, Santander, Visa, and Virgin Money. The experiments lasted throughout the summer, and they focused on exploring various use cases for the new technology.

The banks have found that the new approach could have a major impact on their efforts to reduce fraud and make home buying processes more efficient. There is also great potential in reducing the cost of failed payments in the country.

Furthermore, a platform such as RLN could also be combined with Open Bankings and other similar innovations, which would allow it to deliver greater economic value and support innovation throughout the UK market. Finally, the RLN might also be able to provide a common point of access to new companies. That way, it would let them interface with established institutions and access their settlement systems and enhanced payment options.

Existing Regulations Allow The Creation of “Platform For Innovation”

Lloyds head of digital and markets innovation, Peter Left, who also acted as the co-chair of the RLN project, commented on the banks’ research. He said that working in partnership allowed the participating financial institutions to demonstrate how the platform supports developments in both money and payments.

Furthermore, he added that these developments would be beneficial to both the common public and private sector objectives. And, at the same time, it would also provide clear and long-term customer and industry benefits.

Participating financial institutions also concluded that the legal and regulatory framework in the UK is flexible enough to support the implementation of the novel platform for innovation, so there should be minimal, if any, regulatory issues to deal with. That could allow the banks to enable the platform faster, and start providing its benefits in the near future.