The Regulated Settlement Network (RSN) proof-of-concept (PoC) demonstrated the transformative potential of shared ledger technology for upgrading multi-asset and cross-network transaction settlements in the US financial system.
Spearheaded by SIFMA, the initiative brought together industry leaders, including Citi, JP Morgan, Mastercard, Swift, TD Bank, Visa, and Wells Fargo, to explore a unified settlement infrastructure for tokenized financial instruments such as US Treasury securities, regulated assets, and central and commercial bank deposits. Technology and advisory support came from Digital Asset, Swift, Deloitte & Touche LLP, and Sullivan & Cromwell LLP, among others, highlighting the collaborative nature of the effort.
The PoC addressed inefficiencies in the current financial system, where various asset classes and settlement mechanisms operate in silos. This fragmentation creates operational risks, increases costs, slows settlement times, and reduces transparency. The RSN experiment used simulated data in a controlled environment to demonstrate how shared ledger technology and tokenization can overcome these challenges. It showcased the feasibility of simultaneous and synchronized 24/7 settlement for multi-asset and cross-network transactions, emphasizing the potential to optimize liquidity and collateral management.
Central to the RSN PoC was its ability to create a unified financial market infrastructure (FMI) for tokenized assets, enabling precise and programmable settlement capabilities. The system's design incorporated interoperability solutions, allowing the RSN to connect with third-party networks and achieve synchronized settlement. Importantly, the legal workstream identified no immediate legal barriers to RSN’s implementation under existing frameworks, although further regulatory engagement will be necessary. The initiative's success also highlighted the scalability and versatility of shared ledger infrastructure in addressing modern financial market needs.
Digital Asset's Chief Business Development Officer, Kelly Mathieson, emphasized the RSN's broader implications for financial market innovation. By prioritizing interoperability, scalability, and real-time updates, the project moves beyond narrow proof-of-concept applications to establish a framework for interconnected and efficient digital market infrastructure. Mathieson noted that the RSN exemplifies how next-generation networks can minimize settlement delays, reduce operational risks, and redefine operational standards in financial transactions, paving the way for a more integrated and resilient financial ecosystem.
