Wed 08 May 2024 ▪
4
min of reading ▪ by
A breeze of renovation is blowing through the crypto sphere, driven by giants like Mastercard, in alliance with prestigious institutions such as Citi and JPMorgan. These entities, once the traditional gatekeepers of the financial world, are now venturing into the realm of asset tokenization. This phenomenon, marked by the use of a shared ledger for the settlement of tokenized assets, promises to radically reshape our conception of banking transactions.
A Strategic Partnership for Enhanced Efficiency
The heart of this crypto innovation lies in the experimentation with a shared ledger, where entities like US Bancorp, Wells Fargo, and Visa are also involved.
This system will have two main functions. On one hand, it will simulate crypto transactions in US dollars. On the other hand, it will ensure increased liquidity and security.
These institutions are testing new methods for two reasons. They want to reduce errors and frauds. In parallel, they aim to speed up the process of cross-border transactions.
At the heart of this revolution lies blockchain technology. It facilitates a faster and more transparent settlement of tokenized assets. These assets include commercial bank money and quality debt securities.
Mastercard plays a key role with its Regulated Settlement Network (RSN) project. This project aims to establish a strong legal framework. This framework will facilitate the integration of crypto innovations into the digital economy.
The involvement of major firms such as Swift and Deloitte demonstrates the importance of this project. It has an international scope and disruptive potential. These collaborations signify a shared willingness to adapt the financial sector to the digital age.
Crypto Regulatory Challenges on the Horizon
In the United States, the debate on Central Bank Digital Currencies (CBDCs) is gaining momentum. Figures like Jerome Powell have expressed reservations. They highlight the privacy issues and the data surveillance by government entities.
The Federal Reserve Bank’s New York Innovation Center plays a crucial role. As a technical observer, it ensures that the development of these technologies is in compliance with regulations and market expectations.
Finding a consensus on the use of crypto in the American financial system is a significant challenge. Participants in the program hesitate to engage in further research phases. This shows the caution with which this innovation is approached.
Towards a Programmable and Frictionless Future
The idea of a programmable settlement system, operating without interruptions and frictionless, is slowly becoming a reality. Raj Dhamodharan from Mastercard highlights the benefits of such infrastructure, which could radically transform financial markets (including crypto).
As reported by coindesk, with participants like the Securities Industry and Financial Markets Association (SIFMA) and banks such as TD Bank and Zions Bancorp, the securities sector is also gearing up to integrate these technological advancements into its operations.
The project is headed towards a future where transactions are instantaneous, secure, and above all, embedded within a well-defined legal framework. This foreshadows a new era for financial transactions, with crypto playing a central role.
As Mastercard and its partners continue their tests and search for consensus, the global financial landscape stands on the brink of a major transformation. Tokenized transactions, supported by robust infrastructure and strategic partnerships, promise to redefine standards of speed, security, and efficiency in the world of finance. It’s a horizon filled with opportunities and challenges, ready to be explored and mastered. Meanwhile, bitcoin tumbles below the 2014 thresholds.
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Fasciné par le bitcoin depuis 2017, Evariste n’a cessé de se documenter sur le sujet. Si son premier intérêt s’est porté sur le trading, il essaie désormais activement d’appréhender toutes les avancées centrées sur les cryptomonnaies. En tant que rédacteur, il aspire à fournir en permanence un travail de haute qualité qui reflète l’état du secteur dans son ensemble.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
