UK Finance Expands Pilot for Shared Ledger to Track Banking Payments

According to Bloomberg, UK Finance, an industry body, is broadening its pilot of a shared ledger designed to monitor banking payments. This move is part of an effort to connect various elements in the emerging digital assets landscape. The trial includes banks and is a significant step towards establishing a commercial system that all banks can utilize for tokenized deposits and securities. The objective is to simplify and expedite transactions across borders and systems by recording more assets as a token on a unified blockchain. This approach also aims to minimize the risk of errors and fraud. The latest pilot commenced in February, as stated by Gilbert Verdian, CEO of Quant. Quant is a company that develops interoperable blockchain networks and is supplying the technology for the pilot. Companies are anticipated to use the trial platform for two to three years before the technology is commercially implemented, Verdian added. The pilot's results will be released in August. Fintech startups and tech companies will be invited to join the program in July to begin testing new products based on tokenized commercial bank money. Verdian mentioned in an interview that businesses are eager to experiment with this technology faster than central banks can develop their own digital currencies. He believes that this is a game-changer for banks as it allows business models to operate more efficiently, free from the constraints of the current payment system. Asset managers are also expected to use the pilot platform to tokenize their funds. The system could potentially be used for settling mortgages using programmable funds. This pilot is one of several initiatives pursuing a similar objective. The Bank of International Settlements has initiated multiple projects in recent years to explore how tokenized forms of money, such as central bank digital currencies, would function in practice. UK Finance, which has been working on the Regulated Liability Network concept for over a year, stated that the ledger allows participants to record, transfer, and settle transactions across central bank money, commercial bank money, and electronic money.