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Visa, Mastercard And Top Banks Test Asset Tokenization To Reach A Potentially $5 Trillion Large Industry

VISA, Mastercard, JP Morgan joining forces to test 'Regulated Settlement Network' system to tokenize and finalise payments on the Blockchain.

Some of the largest financial institutions within the US are joining forces to test shared-ledger technology that would see their assets being tokenized and allow for settlements to be made on the Blockchain, mimicking transactions made in USD. A Bloomberg report states that Mastercard, JPMorgan, Wells Fargo, Visa, and Citibank are some of the financial giants participating in the testing.

The aim of the collaboration is to explore tokenized asset settlement for commercial bank transactions and investment-grade debt securities.

Commenting on the collaboration, Raj Dhamodharan, executive vice president for blockchain and digital assets at Mastercard said, “As blockchain technology continues to mature, it will be critical for public and private organizations to partner closely to explore how it can be applied to solve for real-world pain points and improve efficiencies.”

More About New Tokenized Regulated Settlement Network

The scheme has been named the ‘Regulated Settlement Network proof-of-concept,’ and the testing will simulate dollar transactions. Essentially, the project seeks to make cross-border and cross-system transactions faster and cheaper while also reducing errors.

“The application of shared ledger technology to dollar settlements could unlock the next generation of market infrastructures – where programmable settlements are 24/7 and frictionless,” added Dhamodharan.

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Industry experts seem to think that if this ledger technology is successful, it will have huge implications for the financial sector. There are currently many different systems for each sector, such as commercial banking, securities, and central banking. With the success of the ledger technology testing, all of these systems could be combined within one tokenized ledger that lives on the blockchain.

A $5 Trillion Industry In The Making 

Bloomberg reports that the ongoing trial is built on a 12-week test from 2022 that focused on both cross-border and interbank payments.

The banks that are taking part in this ledger technology testing are pooling their resources to achieve the full potential of this scheme.

Back in March, Citi Analyst Ronit Ghose predicted that this very technology could be a $5 trillion industry by 2030, declaring that CBDCs (Central Bank Digital Currencies) will push “the adoption in financial services of tokenized assets and tokenized money.”

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

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