Mastercard joins US banking giants to develop tokenized payments

As a researcher with a background in fintech and blockchain technology, I’m excited to see Mastercard joining forces with U.S. banking giants to develop distributed ledger technology for banking payments using tokenization. This collaboration has the potential to revolutionize cross-border payments by increasing efficiency and reducing errors and fraud.

Mastercard teams up with major American banks to explore the use of distributed ledger technology and tokenization for processing banking transactions.

Based on a recent announcement, the firms are set to trial a regulatory-compliant distributed ledger named Regulated Settlement Network (RSN). The objective is to enhance the speed and accuracy of cross-border transactions while minimizing potential mistakes and dishonest activities.

“As blockchain technology progresses, it becomes essential for collaborative efforts between governments and businesses to unearth its potential applications in addressing real-life challenges and enhancing productivity.”

Raj Dhamodharan, Executive Vice President, Blockchain and Digital Assets at Mastercard

Ten prominent banking institutions are involved in trialing the novel technology: Citi, JPMorgan, Mastercard, Swift, TD Bank, US Bank, USDF, Wells Fargo, Visa, and Zions Bancorp.

Among the six other contributors to this project, you’ll find the esteemed MITER Corporation from the non-profit sector, financial institutions BNY Mellon and Broadridge, as well as industry heavyweights DTCC, ISDA, and Tassat Group.

As a tokenization analyst, I can explain how the innovative technology we’re working with enables the consolidated settling of financial assets like Treasury bonds, investment-grade debts, and commercial bank money. Unlike previous technologies, our system – Reverse Settlement Network (RSN) – facilitates settlements on a unified platform by transforming diverse assets into tokens and depositing them onto a distributed ledger.

Mastercard has been a significant force in the advancement of blockchain technology for some time now. Recently, MetaMask, a multichain digital wallet, initiated trials of an on-chain card that connects to the Mastercard network.

Two titans of their respective industries came together for the project: a cryptocurrency wallet boasting over 30 million monthly active users, and a conventional financial payment method, encompassing credit and debit cards with global reach.

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2024-05-08 18:26