According to Cointelegraph, the Regulated Liability Network (RLN) has completed its United Kingdom discovery phase and is set to proceed with a retail central bank digital currency (CBDC) use case. The RLN project aims to accommodate central bank, commercial bank, and regulated non-bank transactions operating within partitions on a single network. The RLN is a regulated financial marketplace infrastructure in the U.K., with contributors from financial institutions worldwide and support from advocacy group UK Finance.
The RLN discovery phase examined three potential use cases for the network: consumer domestic payment, wholesale cross-border payment, and securities settlement. The project settled on the first case to pursue a proof of concept. The report found that the RLN provided several benefits for domestic payment, such as providing consistency between CBDC and commercial bank money, helping reduce authorized push payment fraud, and improving settlement time.
The RLN would use a native settlement token and contain tokenized regulated money and digital assets on the same ledger. Tokenized liabilities (money) would remain claims on the issuer, rather than on the RLN. The project completed a pilot program for wholesale cross-border payments earlier this year, but it now says this use case may be the least feasible for a proof of concept due to the complexity of dealing with multiple jurisdictions, participants, and regulatory requirements. Securities settlement was judged to have a medium degree of feasibility due to the multiple non-bank parties involved and regulatory complexity.