- Mastercard and major US banks are testing shared-ledger technology to streamline the settlement of tokenized assets.
- US banks are seeking SEC assistance to participate in the Bitcoin ETF market amidst regulatory challenges.
- Republic First Bank’s closure highlights the need for regulatory adjustments in the banking sector.
Mastercard and major US banks are exploring shared-ledger technology to revolutionize the settlement of tokenized assets. Meanwhile, US banks are seeking regulatory adjustments to participate in the Bitcoin ETF market.
Mastercard and US Banks Test Shared-Ledger Tech
Mastercard, in collaboration with major US banks, is pioneering a new frontier in financial technology by testing shared-ledger technology. This innovation aims to enable the seamless settlement of tokenized assets, including commercial bank money and various securities such as Treasury bonds and investment-grade debt. The initiative, known as the Regulated Settlement Network proof-of-concept, seeks to streamline transactions in dollars, with the ultimate goal of enhancing cross-border transaction efficiency while minimizing errors and fraud risks.
Transformative Potential of Ledger Technology
Ledger technology holds transformative potential, potentially revolutionizing financial transaction processes. Currently, assets like commercial bank money and securities operate on disparate systems. However, by tokenizing these assets and leveraging distributed ledger technology, settlement processes could be consolidated onto a unified platform. This trial represents an evolution from a previous 12-week test focused on domestic and cross-border payments in dollars, initiated in late 2022.
US Banks Seek SEC Assistance for Bitcoin ETF Participation
In a separate development, major US banks are seeking assistance from the Securities and Exchange Commission (SEC) to participate in the recently approved spot Bitcoin exchange-traded funds (ETFs) market. Leading banking associations, including the Bank Policy Institute (BPI) and the American Bankers Association (ABA), have penned a joint letter to SEC Chair Gary Gensler, requesting targeted modifications to Staff Accounting Bulletin No. 121 (SAB 121) to facilitate their involvement.
Conclusion
The exploration of shared-ledger technology by Mastercard and major US banks signifies a significant step towards the future of financial transactions. Meanwhile, the move by US banks to seek regulatory adjustments for participation in the Bitcoin ETF market underscores the growing interest in cryptocurrency within traditional financial institutions. These developments highlight the evolving landscape of the financial sector and the increasing intersection of traditional finance and digital assets.
