London-based tech provider SETL has announced a joint project with New York company Digital Asset to create a new Regulated Liability Network (RNL) protocol which can be used by regulated institutions to launch interoperable tokens.
The RNL blockchain network, first outlined in 2021 by Citibank’s Tony McLaughlin, aims to provide the regulated finance sector with a unified solution to deal with tokenised assets on a single network.
Under the terms of the new protocol, a single token will represent a promise made by the issuer to the token holder. Moreover, the RNL will handle any token transfers between banks, minting and burning the tokens in a single operation to achieve real-time settlement between the customers of any regulated institution.
Yuval Rooz, CEO of Digital Asset, noted: “We have always taken pride in enabling our clients to innovate and this is no exception. Interoperability is a major goal for us and by working with SETL we will produce a world class network with the ability to connect and communicate across all existing clients’ solutions to serve the regulated community.
“This network will serve as a key building block as we develop the Global Economic Network and to connect the leading financial institutions and usher in a new wave of innovation across the globe.”
Shaul Kfir, Chief Architect at Digital Asset, added: “SETL’s approach to the RLN complements our own technology perfectly. SETL and Digital Asset have an unrivalled combined experience in working with tier-one institutions to solve the unique challenges they have in bringing innovative ideas to their clients.”
SETL’s Chief Engineer, Anthony Culligan, commented on the partnership: “The RLN approach finally gives regulated institutions a token network that is fit for purpose. This new network lines up technology and regulation in a way that other blockchains simply fail to match. It is an open protocol and breaks the silo of closed loop systems.”
On working with Digital Asset, Culligan added: “Digital Asset and SETL are on the same page on how we can deliver this to the financial community. We have two first class technology teams and will create a world beating product.”
Philippe Morel, CEO of SETL, stated that the work between both companies will ‘fulfil the promise’ of blockchain for banks and customers everywhere.
He explained: “This approach will be easy for organisations to embrace and will provide an equally simple model for CBDC, bank and e-money coins, as well as any kind of tokenised liability such as bonds, loans and shares.”
The initiative’s testing phase will begin later this year and could see the onboarding of its first use cases shortly after. Additionally, SETL and Digital Asset will open a prototype network where interested institutions can familiarise themselves with the new protocol.
Currently both companies are flourishing on the technology front. SETL has gained fame through the French fund distribution platform IZNES which powered the world’s first Central Bank Digital Currency (CBDC) live fund transaction. Digital Asset, meanwhile, provides interoperable smart securities to clients such as BNP Paribas and Nasdaq through its own Daml blockchain smart contract framework.