Some of the biggest names in the US banking industry are coming together on a proof of concept for a regulated digital asset settlement platform.

Citi, Mastercard, Wells Fargo and the New York Fed's innovation centre are among those involved in the 12-week project to explore the feasibility of an interoperable digital money platform known as the regulated liability network (RLN).

The PoC will test a version of the RLN design that operates exclusively in US dollars where commercial banks issue simulated digital money or “tokens” - representing the deposits of their own customers - and settle through simulated central bank reserves on a shared multi-entity distributed ledger.

The project will also test the feasibility of a programmable digital money design that is potentially extensible to other digital assets, as well as the viability of the proposed system within existing laws and regulations.

BNY Mellon, HSBC, PNC, TD Bank, Truist and US Bank are all participating in the experiment, with the technology provided by SETL and Digital Asset, powered by Amazon Web Services.