In the dynamic world of finance, the quest to optimise processes and improve security is constant. In this context, the innovative initiative of Mastercard in collaboration with major banks in the United States to explore the feasibility of the tokenised settlement as a solution to the challenges facing cross-border payments.
What is tokenised settlement?
Tokenised settlement is an innovative alternative that seeks to transform the way international payments are settled. Through the technology of distributed registration (DLT)also known as blockchainIn this way, an immutable and transparent record of transactions is created, allowing for greater efficiency and security in the process.
How does tokenised settlement work?
In essence, tokenised settlement involves the representation of traditional assets, such as cash or securities, on digital tokens. These tokens, stored in the DLT, facilitate the exchange and settlement of payments in a faster, safer and more transparent manner.
What are the benefits of tokenised settlement?
The implementation of tokenised settlement brings with it a number of significant advantages:
- Increased efficiency: The use of digital tokens eliminates the need for intermediaries and manual processes, significantly reducing the time and costs associated with traditional settlements.
- Increased security: DLT technology guarantees the immutability and transparency of transactions, minimising the risk of fraud and errors.
- Cost reduction: By eliminating intermediaries and automating processes, tokenised settlement can generate considerable savings in transaction costs.
- Increased traceability: The immutable nature of DLT allows full traceability of the payment journey, facilitating auditing and compliance.
Who is involved in this initiative?
Mastercarda global leader in the payments industry, is at the forefront of this initiative, joining forces with major U.S. banks including Citi, Bank of America, JPMorgan Chase y Wells Fargo. In addition, leading technology companies such as IBM, R3 y Digital Asset are also part of the project, contributing their expertise in DLT and digital solutions.
What stage has the project reached?
Currently, the initiative is in the phase of proof of conceptwhere US dollar settlements are being simulated to assess the feasibility and potential of the technology. The results so far are encouraging, showing the potential of tokenised settlement to transform the cross-border payments landscape.
What are the implications for the future?
The success of the proof of concept could open the door to a wider adoption of tokenised settlement in the financial services industry. This could result in a more efficient, secure and transparent cross-border payment system, benefiting both financial institutions and end-users.
Conclusion
The alliance between Mastercard, US banks and technology companies to explore tokenised settlement represents a significant step towards the future of cross-border payments. This innovative initiative has the potential to revolutionise the industry, offering greater efficiency, security and transparency in international transactions. It is expected to advance the development and adoption of this technology in the coming years, transforming the way payments are made globally.