The New York Federal Reserve Bank (NYIC) Innovation Center successfully completed its proof of concept of a Regulated Liability Network (RLN), which was conducted in collaboration with nine major financial institutions and the Swift network.

Using distributed ledger technology and a simulated central bank digital currency (CBDC) in the United States, the project developed a notional infrastructure for exchanging and settling commercial bank deposit tokens and central bank liabilities. This infrastructure was built by the project.

At the moment, transactions involving assets are completed by sending messages back and forth between the various parties involved.

Tony McLaughlin, head of emerging payments and business development at Citi Treasury and Trade Solutions, said in a webcast presenting the study’s findings that while messages happen virtually quickly, settlement doesn’t.

The project decided to remove trustlessness and anonymity from its blockchain, among other aspects, to develop a system that would store value on the ledger instead of resolving disputes via messages.

According to McLaughlin, the simulated RLN was capable of 24-hour operation and had multi-asset liquidation as well as programmability.

According to what McLaughlin claimed, the simulated RLN maintained comprehensive anti-money laundering and Know Your Customer security measures for the United States at foreign settlements.

He called the RLN “a game changer for international users of the dollar” and predicted that it will allow the dollar to continue to play the role of preferred international currency.

In addition, the research findings were compiled into separate papers that focused on business, law, and technology, respectively.

The initiative only considered regulated assets, so cryptocurrencies and stablecoins were excluded from consideration.

In November it was revealed that the initiative will be piloted for a period of twelve weeks.

In addition to the New York Investment Company (NYIC), this effort involves working in conjunction with several major financial institutions and payment firms. These companies include Wells Fargo, BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, and Truist. The technology for this initiative is supported by Amazon Web Services and provided by SETL in association with Digital Asset.