From Mastercard to JPMorgan, U.S. banks join forces by officially undergoing a proof-of-concept (PoC), being used as “the” major catalyst in normalizing crypto.
Unlike your typical proof-of-work and proof-of-stake, the one that ends with “C” is a type of pilot project to prove how something would successfully work. “Viability” is the correct term.
The theory in their whitepapers and proposals rests on the fact that traditional-financial products are relying on separate systems. Essentially, they should be consolidated to a single blockchain.
This commercial-tokenization project is called the Regulated Settlement Network or RSN PoC.
The direction taken is a 24/7 blockchain that minimizes cost and time via sharding technology.
It will focus on consolidating common-financial services to one, single blockchain.
Enabling Crypto Settlements Among Banks
Now, this news shouldn’t get confused with U.S. President Biden’s threat to veto crypto in congress. That Capital Hill issue has to do with banks holding your crypto assets. What is happening here, instead, are banks doing crypto transactions on their customers’ behalf.
The question is, “Should we allow our banks to transact in crypto based on our cash accounts?”
The only way to make this happen is not to create new crypto but to tokenize financial assets.
Banks Join Forces In Tokenization …
The key innovation behind the major banks’ move is tokenization.
Though you might not be able to buy and sell crypto through your bank, you can have the bank create a token for you that represents the value of something you own. For example:
- The value of a property you have registered as a token
- The financial sum of a trust you own in a token form
The specific financial products being evaluated include:
- Cash in commercial banks
- Money held by central banks
- Securities like stocks and ETFs
- Treasuries sold by the U.S. government
For Bank Customers and USD Denominations
The pilot project is currently designed for American bank users and will allow transactions that are specifically denominated in USD. Among the leading agencies, you’ll find the following:
- Citi
- J.P. Morgan
- Mastercard
- Swift
- TD Bank N.A.
- U.S. Bank
- USDF
- Wells Fargo
- Visa
- Zions Bancorp
- Deloitte
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