According to the announcement made by NY Fed on Tuesday, institutions participating in the testing of digital tokens use cases include Citigroup (C), HSBC (HSBC), BNY Mellon (BK), and Wells Fargo (WFC), as well as payments behemoth Mastercard (MA). NYIC stated that it would begin a 12-week proof-of-concept trial for a central bank digital currency or CBDC. The 12-week proof-of-concept pilot program will investigate the application of this platform.
In addition to simulating tokens and investigating regulatory frameworks, the proof-of-concept study will evaluate the design and development, legal viability, and business application of distributed ledger technology.
The regulated liability network, or RLN, is a network that banks may use to produce tokens that reflect client deposits that are resolved on a central bank reserve on a shared distributed ledger. NYIC Director Per von Zelowitz stated that the NYIC looks forward to partnering with representatives of the banking sector to further study asset tokenization and the development of financial market systems in the U.S. as finance and banking transform.