- RLN could revolutionize UK payments, reducing fraud and costs while supporting new technology such as CBDCs and tokenized assets.
- The Regulated Liability Network aims to improve efficiency and innovation in UK finance, by integrating blockchain and interoperability.
- Having completed a successful pilot phase, RLN is poised to remove barriers for fintech companies and increase long-term innovation within the UK banking sector.
A blockchain-powered ledger called the Regulated Liability Network (RLN) has the potential to completely transform the UK’s $14.5 trillion payments industry. According to UK Finance, this innovative system is seen as a game changer. Following a successful experimental phase involving eleven major banks, the RLN is expected to reduce fraud, reduce failed payment costs and support programmable payments.
According to UK Finance, a blockchain-based ledger, the Regulated Liability Network (#RLN), could significantly benefit the UK’s $14.5 trillion payments industry.
After a successful experimental phase with eleven banks, the RLN is seen as an instrument to reduce fraud, less failures… pic.twitter.com/t1z02ejrrI
— TOBTC (@_TOBTC) September 17, 2024
Improving efficiency and integration
In addition to increasing productivity, the RLN provides a platform for tokenized assets and central bank digital currencies (CBDC). Moreover, it provides interoperability between different payment systems. Consequently, new businesses were able to gain access to established institutions, fostering innovation in the British financial landscape.
The UK financial sector handles trillions of dollars every year, and the RLN could strengthen its security and innovation. UK Finance highlighted the importance of further regulatory involvement to realize the RLN’s full potential. The legal and regulatory framework is flexible enough to accommodate the platform. However, cooperation with regulators is crucial for further development.
Stimulating innovation and lowering barriers
Additionally, the RLN’s platform aims to reduce fraud in online transactions, especially payment-on-delivery for physical goods and bond settlements. Improvements in the home purchasing process were also tested. Consequently, the RLN demonstrated economic value while enabling new functionalities such as programmable payments.
UK Finance’s director of payments, Jana Mackintosh, highlighted the private sector’s eagerness to invest in the future of commercial banks’ money. The group aims to preserve the singleness of money and promote long-term innovation, in line with the objectives of the Bank of England.
In addition to financial institutions, professional service companies were also involved in the experimental phase. Together they explored the RLN’s ability to provide a common entry point for new businesses. This feature could help lower the barriers to entry for financial technology companies.
Britain is actively exploring tokenization and blockchain technologies, with the aim of strengthening the financial sector. With continued regulatory efforts, the RLN could lead the way for future payment innovations.
