Trade body UK Finance has launched the experimentation phase for the new UK Regulated Liability Network (RLN), a collaborative initiative involving 11 member firms.  

The UK RLN is designed as a platform fostering innovation in financial transactions, including traditional commercial bank deposits and tokenised versions on a shared ledger.  

Among the participants in this project are Barclays, Citi, HSBC, Santander, Sand VISA, as well as professional services firms EY and Linklaters. 

A technology consortium including R3, Quant, DXC, and Coadjute, is also part of the initiative. 

The initiative is expected to offer advantages such as diversified payment management options, enhanced fraud prevention measures, and enhanced settlement capabilities.  

These benefits are anticipated to extend to customers, businesses, and the broader UK economy. 

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The experimentation phase, which will continue until mid-2024, will delve into several use cases.  

These include payment-upon-delivery for physical products to combat online marketplace fraud, streamlining the home-buying process to increase transparency and reduce conveyancing fraud, and facilitating digital bond settlements by linking digital customer money with digital assets. 

The project will also assess customer and business benefits by exploring foundational capabilities in line with the Bank for International Settlements and the Bank of England’s Project Rosalind, which is experimenting with an application programming interface for a potential digital pound. 

Furthermore, the technical feasibility of the UK RLN will be tested through a technology sandbox environment, evaluating the system’s functional and non-functional requirements, including simulated connections and transactions. 

Lastly, the experimentation will include an analysis of the legal framework, examining how current and potential future laws and regulations might govern the operation of a shared ledger settlement system and tokenised deposits. 

The results of this phase will be shared after the summer. 

UK Finance managing director Jana Mackintosh said: “We are delighted to bring together several of our members to explore an inclusive design for all digital money.  It is important that the UK financial community works in close collaboration with public sector stakeholders to explore our common objective – to equip the UK with world-leading financial infrastructure.  Our work is designed to inform the best way forward for all forms of regulated digital money.”