17 September 2024 Fintech

Linklaters advises UK Finance on the successful outcome of its Regulated Liability Network experimentation phase

Linklaters has advised UK Finance on the experimentation phase of its UK Regulated Liability Network (RLN) project which involved eleven of its members and has now reached successful completion. This is a new type of financial market infrastructure that can deliver new capabilities for payments and settlement, including tokenisation and programmability.

Across the use cases explored, a number of potential benefits were discovered, including reducing fraud, improving efficiency in the process of home buying and reducing the cost of failed payments in the UK.

The work looked at various technical, legal and business case questions surrounding the development of a ‘platform for innovation’ and the main conclusions are:

  • Such a platform, in collaboration with other important initiatives such as Open Banking, could deliver economic value and support innovation in the market.
  • New functionality, such as programmable payments and locking/unlocking of funds, was demonstrated across a range of use cases.
  • It could provide new and innovative firms with a common point of access to enable them to interface with established institutions, and enhanced payment and settlement systems.
  • The legal and regulatory framework of the UK is sufficiently flexible to support the implementation of a ‘platform for innovation’, subject to further implementation and regulatory engagement.

Linklaters’ Fintech sector team advising on this project is led by partner Richard Hay, alongside partners Harry Eddis, Michael Voisin and Peter Bevan, and managing associates Olivia Murphy and Sam Quicke. They were supported by Corporate partner Finn Griggs, Antitrust & Foreign Investment partner Jonny Ford, and TMT / IP partners Paul Joseph and Julian Cunningham-Day.

Richard Hay commented:

“The RLN has set the foundation for a scalable and resilient infrastructure for digital money, paving the way for continued innovation in the payments ecosystem. This initiative also highlights the value of industry collaboration, and we look forward to the next phases of this project.”

With the experimentation phase completing, this offers an opportunity for other financial institutions and public sector organisations to engage with the learnings from the experiments and become involved in the future phases of work. You can find out more about the RLN here.