U.K. Finance alongside 11 of its members completed the experimental phase of a tokenization and CBDC platform.
The program identified improvements in economic value and enhanced functionality.
Trade association U.K. Finance said it completed the experimental phase of a tokenization and central bank digital currency (CBDC) platform and is looking to work with regulators and other public bodies on developing payment networks based on the technology.
Involving 11 member banks, including Barclays, Citi UK, HSBC and Natwest, as well as professional service firms, the program concluded that such a platform would help deliver economic value and could enable new functionality such as programmable payments.
The Regulated Liability Network is a financial market infrastructure “that can deliver new capabilities for payments and settlement, including tokenization and programmability,” U.K. Finance said in a statement.
An increasing number of platforms and institutions are exploring tokenization, the process of bringing real-world assets including securities like stocks on-chain. Last year, U.K. regulator the Financial Conduct Authority (FCA) said it supported industry leaders’ report on the implementation of fund tokenization. The newly elected Labour government set out a policy aim for the country to become a securities tokenization hub earlier this year in the run up to the general election.
“Working in partnership, we have demonstrated how this platform supports developments in money and payments aligned to common public and private sector objectives, while also providing clear and long-term customer and industry benefits,” Peter Left, co-chair of the RLN Project, said in the statement.
The core of the platform comprised a multi-issuer tokenization platform that facilitated the issuance of tokenized commercial bank deposits plus simulated a wholesale CBDC – a digital token issued by a central bank for institutions, not retail users. It also included an application program interface (API) layer that enabled interoperability across all forms of money and existing ledgers.
“The legal and regulatory framework of the U.K. is sufficiently flexible to support the implementation of a ‘platform for innovation’, subject to further implementation and regulatory engagement,” the organization said.