The future of money is being reimagined—not in secret boardrooms, but on public blockchain forums. At today’s Cordacon enterprise blockchain conference, Tony McLaughlin from Citibank unveiled a bold vision: a coordinated effort among central banks, commercial banks, and e-money providers to win what he calls the “digital money format war.” The battleground? Not physical currency or traditional banking systems, but the foundational infrastructure of tomorrow’s financial ecosystem.
McLaughlin’s proposal centers on the Regulated Liability Network (RLN)—a shared, permissioned distributed ledger technology (DLT) platform designed to unify regulated financial institutions under one interoperable system. This isn’t just about digitizing money; it’s about redefining how value moves in a 24/7 global economy.
A Unified Ledger for Regulated Money
At its core, the RLN concept envisions a tiered and partitioned blockchain architecture that mirrors today’s banking hierarchy. In this model:
- Central banks retain their role as issuers of base money and supervisors of commercial banks.
- Commercial banks and e-money providers operate within their existing legal frameworks, managing customer liabilities—now in tokenized form.
This structure preserves current regulatory relationships while embracing modern technology. Because most financial regulations are technology-agnostic, McLaughlin argues that no major legislative overhaul would be needed, potentially sidestepping the political and operational hurdles associated with launching full-scale central bank digital currencies (CBDCs).
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Beyond the Public vs. Private Money Debate
One of the most persistent narratives in digital finance pits public money (like CBDCs) against private money (such as commercial bank deposits). But McLaughlin challenges this binary. Instead, he reframes the conflict as regulated vs. unregulated money—a distinction with far greater implications for financial stability and consumer trust.
Under this lens:
- Central bank money, commercial bank deposits, and regulated e-money all represent legally enforceable liabilities.
- In contrast, most cryptocurrencies lack clear liability structures.
- While stablecoins aim to bridge the gap, many remain unregulated, and their legal standing is often ambiguous.
By focusing on regulation rather than ownership, the RLN creates a pathway for any institution issuing regulated liabilities to participate—regardless of whether they’re a central bank or a fintech startup.
Why Fragmentation Weakens the Regulated Sector
A key concern raised by McLaughlin is fragmentation. If every commercial bank launches its own proprietary “bank coin” or settlement token, the regulated sector risks becoming a patchwork of incompatible systems.
“That defeats the purpose,” McLaughlin warned. “If we each go our own way, we’ll lose cohesion in the face of unregulated alternatives.”
Instead, a shared ledger ensures:
- Interoperability across institutions
- Standardized compliance and auditability
- Seamless cross-border settlement
And unlike crypto-native blockchains, where assets are typically token-based, regulated money has traditionally been account-based. The RLN bridges this divide by enabling tokenized representations of account-based liabilities—combining the best of both worlds.
From Concept to Real-World Testing
Citi isn’t just theorizing. Its RLN solution is one of 15 finalists in the Monetary Authority of Singapore’s (MAS) Global CBDC Challenge, a high-profile initiative pushing the boundaries of digital currency innovation.
The bank is collaborating with:
- SETL, a DLT firm in which Citi previously invested
- OCBC Bank, a major Singaporean financial institution
- BondEvalue, a digital bond platform
Crucially, McLaughlin emphasized that this is not a Citi-owned platform. It’s designed to be non-proprietary, open to consortium governance, and built on principles of shared ownership and neutrality.
“This isn’t about Citi leading,” he said. “It’s about the entire regulated financial industry coming together to embrace tokenization—collectively.”
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Toward a Global Real-Time Settlement System
One of the most transformative possibilities of the RLN is its potential to scale across borders. By integrating multiple central banks into a single network, the system could evolve into a global real-time gross settlement (RTGS) infrastructure.
This aligns with ongoing experiments like Project mBridge and other multi-CBDC (m-CBDC) trials, which explore how central banks can settle cross-border transactions instantly and efficiently. However, the RLN goes further by including commercial banks and e-money providers from day one—making it not just a central bank utility, but a comprehensive financial network.
Addressing Systemic Risk: The Flip Side of Unity
While the benefits are compelling, McLaughlin acknowledged a critical risk: systemic vulnerability.
“If the entire regulated sector runs on one shared ledger, and that network suffers a technical failure—even temporarily—it could bring the whole system to a halt,” he cautioned.
This single point of failure represents a new kind of systemic risk—one that demands unprecedented levels of resilience, redundancy, and governance oversight. Any implementation would require:
- Military-grade cybersecurity
- Decentralized node distribution
- Fail-safe rollback mechanisms
- Transparent governance protocols
Still, proponents argue that these challenges are manageable compared to the long-term risks of inaction—especially as unregulated digital assets continue to gain traction.
Core Keywords Driving the Vision
The RLN concept taps into several pivotal trends shaping the future of finance:
- Digital money
- Distributed ledger technology (DLT)
- Tokenized assets
- Regulated liability network
- CBDC
- Real-time settlement
- Financial interoperability
- Programmable money
These keywords reflect both technical innovation and regulatory pragmatism—making the RLN not just a technological upgrade, but a strategic response to an evolving financial landscape.
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Frequently Asked Questions (FAQ)
Q: What is the Regulated Liability Network (RLN)?
A: The RLN is a proposed shared DLT platform that enables central banks, commercial banks, and e-money providers to issue and manage tokenized forms of regulated money within a unified, interoperable system.
Q: How is RLN different from CBDCs?
A: While CBDCs are typically issued solely by central banks, RLN includes all forms of regulated money—including commercial bank deposits and e-money—on a single network. It may reduce the need for standalone CBDCs by extending tokenization across the entire regulated sector.
Q: Does RLN require new laws or regulations?
A: Not necessarily. Since most financial regulations are technology-neutral, RLN could operate within existing legal frameworks, focusing on how liabilities are represented rather than changing their nature.
Q: Can stablecoins be part of the RLN?
A: Potentially. If stablecoins become fully regulated and their liabilities are clearly defined, they could be integrated into the network alongside other regulated instruments.
Q: Who owns and governs the RLN?
A: The network is designed to be non-proprietary and collectively governed by participating institutions—not controlled by any single entity, including Citi.
Q: What happens if the network goes down?
A: This is a major concern. A shared ledger creates efficiency but also systemic risk. Robust fail-safes, decentralized architecture, and continuous monitoring would be essential to prevent or mitigate outages.
The Regulated Liability Network isn’t just another fintech experiment—it’s a strategic blueprint for preserving the relevance and resilience of regulated finance in the digital age. As tokenization accelerates and global payment demands evolve, collaboration may be the only way forward.