Blockchain Ledger Could Revolutionize UK’s $14.5 Trillion Finance Industry, Says Trade Body
Why Trust Cryptonews
A blockchain-based ledger for payments and settlements could transform the United Kingdom’s finance sector, which processes an astounding $14.5 trillion in payments annually.
UK Finance, the country’s leading finance trade body, recently praised the potential of the Regulated Liability Network (RLN) to drive innovation in the sector following a successful experimental phase.
The RLN, a blockchain-powered platform designed for central bank digital currencies (CBDCs) and tokenized assets, has shown significant promise, according to a report published on September 17 by UK Finance.
RLN Could Facilitate Programmable Payments
The trade group noted that the RLN could facilitate programmable payments, reducing fraud, and cutting the cost of failed transactions.
Key to the RLN’s promise is its ability to offer a secure and efficient system for recording, transferring, and settling payments.
It is primarily intended for use by commercial banks and can support various forms of digital money, including wholesale CBDCs and electronic money.
UK Finance emphasized that further collaboration with regulators and other public entities would be essential to fully unlock the network’s potential.
“The private sector wants to invest in the future of commercial bank money, and a partnership with regulators is the best way of successfully making this happen,” said UK Finance’s managing director of payments, Jana Mackintosh.
The RLN’s distributed ledger technology (DLT) provides a platform for innovation, according to UK Finance.
The trade body noted that the UK’s legal and regulatory framework is flexible enough to support the platform, but additional steps must be taken to implement it and address any emerging regulatory concerns.
Among the positive outcomes from the experimental phase, UK Finance found that the RLN could provide new firms with a “common point of access” to established financial institutions and enhanced payment systems.
The findings align with the goals outlined by the Bank of England, which emphasized the need to maintain the integrity of money and foster innovation within the UK payments industry.
“The Bank of England recently published a Discussion Paper which laid out several objectives for the UK’s payments sector, including the aims of maintaining the singleness of money and promoting sustained innovation – the RLN could help the industry meet these objectives,” the trade body wrote.
The RLN experiment involved participation from 11 major banks, including Barclays, HSBC, Citi, and Mastercard.
UK Introduces Crypto Legislation
Last week, the UK government introduced a new bill aimed at clarifying the status of digital assets, including non-fungible tokens (NFTs), cryptocurrencies, and carbon credits, as “things” and “personal property” under the nation’s property laws.
The UK has been among the countries that have ramped up regulatory efforts following some high-profile bankruptcies last year.
The Financial Conduct Authority (FCA) oversees crypto activities, focusing on anti-money laundering measures and consumer protection.
Last year, the FCA implemented new rules that require crypto firms to register with the financial regulator and have their marketing materials approved by an FCA-authorized firm.
The watchdog has warned that failure to comply can result in criminal charges, including unlimited fines and up to two years’ imprisonment, for domestic and overseas exchanges operating in the UK.
