Acquiring SETL, and a Pilot at the New York Fed
Today the Federal Reserve Bank of New York’s Innovation Center announced a proof-of-concept our team has been quietly proud of for months: the Regulated Liability Network U.S. Pilot. Its technology partner is SETL—a company that, in June, became part of Colendi.
The acquisition surprised some people. Colendi built its name on credit scoring and embedded finance for people the traditional system could not see; SETL builds wholesale settlement infrastructure for the institutions at the very center of that system. Founded in London and led by Anthony Culligan and Philippe Morel, SETL had spent years building distributed-ledger settlement systems capable of moving regulated money between banks and market infrastructures. To us the two were never far apart. They are the two ends of the same stack: one decides who can be trusted with credit, the other moves and settles the money once the decision is made. A financial system that is becoming programmable needs both, and we would rather own the rails than rent them.
The New York pilot is where that infrastructure meets its most demanding test. Over twelve weeks, the New York Innovation Center and a group of the largest U.S. banks—BNY Mellon, Citi, HSBC, Mastercard, PNC, TD Bank, Truist, U.S. Bank, and Wells Fargo—will explore whether central bank money and commercial bank deposits can be represented as tokenized “regulated liabilities” on a shared distributed ledger, and settled between institutions in a single, always-on, programmable network. SWIFT is supporting interoperability; Sullivan & Cromwell is advising on the law; Deloitte on the design. SETL, together with Digital Asset, is providing the technology sandbox.
It is worth being precise about what this is and is not. It is a research proof-of-concept, run in a test environment with simulated data. It is not a product, not the launch of a digital dollar, and not an endorsement by the Federal Reserve of any company or design. What it is, is serious: some of the most important financial institutions in the world sitting down to ask whether the plumbing of regulated money can be rebuilt on a common, programmable substrate—and testing the idea on infrastructure our team now owns.
That is the through-line of everything we write here. Money is becoming something that executes, and the institutions that matter will be the ones that control the layer where value actually moves and settles. Colendi began by trying to give an invisible borrower a credit file. Acquiring SETL, and standing behind a table at the New York Fed, is the same conviction carried to the other end of the system: banking is necessary, banks are not, and the settlement layer is worth building well.
Congratulations to Anthony, Philippe, and the entire SETL team.