The partnership between the significant banking giants in the US and Mastercard is aimed at streamlining multiple asset-class settlements on a shared ledger platform.
Payment processing and settlement firm Mastercard has joined hands with major banking institutions in the United States, such as Citigroup, Visa and JPMorgan, to test the use of distributed ledger technology for banking settlements using tokenization.
The partnership between the banking giants and the payment processor aims to test shared-ledger technology called Regulated Settlement Network (RSN). RSN enables tokenized assets like Treasury, investment-grade debt instruments, and money from commercial banks to be settled collectively.
Currently, securities like investment-grade debt and assets like money from commercial banks function on different systems. Using RSN, settlement procedures will occur on a single platform by converting various assets into tokens and settling them on a distributed ledger.