Europe has produced no shortage of tokenisation trials. Banks have issued digital bonds, tested distributed ledgers and explored new forms of settlement money. Yet its digital market still resembles the traditional one: capable, heavily supervised and divided among national systems and institutional interests.
Regulated Layer One is designed as shared infrastructure for regulated institutions rather than another vertically integrated product. Its wager is that Europe’s bottleneck is organisational: who controls the network, who bears responsibility when something fails and whether rivals can use the same rails without empowering a competitor.
Regulated Layer One Targets the Gap Between Two Models
Public permissionless networks show what can happen when developers and assets meet on open infrastructure. Ethereum became a laboratory for programmable finance partly because no committee approves every application. For a regulated institution, however, technological endurance is not a complete risk assessment. Management must identify responsibilities, dependencies and contingency plans.
Private networks answer some of those questions, yet introduce another problem. Their owners may control access, favour their own services or extract more value as activity grows. A competitor invited onto such a chain may wonder whose franchise it is strengthening.
Regulated Layer One seeks a narrow middle ground. It adds permissioning, identifiable participants and institutional controls at network level, while leaving the asset, service and access layers open to competition. The platform determines who may participate rather than which business model deserves to succeed. Its defining feature is infrastructure intended to operate as a utility rather than a revenue-extraction platform.
A Cooperative Answer to a Fragmented Market
RL1 is being organised as a European cooperative in Luxembourg. SWIAT supplies the infrastructure and operates the technology, yet is positioned as a service provider without a vote in the cooperative. It can in principle be replaced if it fails to meet its obligations. That separation matters: a neutral platform cannot credibly ask rivals to cooperate if its operator also determines the network’s commercial direction.
SWIFT grew from banking’s need for common messaging; RL1 applies similar logic to transactions. Europe’s exchanges, depositories and national structures can be linked bilaterally, but every connection adds complexity. A shared ledger could place institutions in a common technical environment where interoperability and standards are easier to achieve.
The Missing Cash Leg
Tokenised securities cannot deliver their full promise if settlement money remains detached. The goal is delivery versus payment in which asset and cash settle together. The Eurosystem’s Pontes and Appia programmes therefore loom large. Pontes is the nearer-term bridge between market DLT platforms and TARGET Services, allowing transactions to settle in central bank money. It is designed for multiple ledgers, so compatibility is valuable but not unique to Regulated Layer One.
SWIAT is working on Pontes connectivity through services above the platform; the integration does not occur at RL1’s base layer or belong to the cooperative. Appia is intended to produce a blueprint for an integrated tokenised wholesale ecosystem by 2028. Tokenised wholesale central bank money could eventually meet commercial bank money, stablecoins and securities on RL1, but that remains an ambition rather than a Eurosystem decision.
The Network-Effect Test
Sound architecture does not guarantee adoption. Large incumbents may prefer systems they control, while corporate chains can generate immediate activity from existing customers. RL1’s answer is that proprietary networks encounter a ceiling beyond their owner’s sphere of influence. Competitors are less likely to build core business on a rival’s platform.
Canton may be the direct benchmark, gathering American and European institutions around institutional infrastructure. RL1 counters with European governance, utility economics and a more open architecture. Its challenge is converting a working foundation into self-reinforcing adoption. Success would mean broad European participation and visible interaction between securities and several forms of digital money. Failure would leave another credible network below critical mass.
Regulated Layer One tests a proposition larger than blockchain design. Europe’s financial sector often endorses integration while defending structures that preserve local power. RL1 asks institutions to treat the platform beneath their products as a common good. Their response will show whether Europe can turn regulatory discipline and cooperative governance into an advantage—or whether the next generation of financial rails will consolidate elsewhere.
Ivica Aračić at LinkedIn
Ivica Aračić’s Newsletter
Regulated Layer One Website
ASAP: A Conceptual Model for Digital Asset Platforms
SWIAT Research
Previous BFRR Episode with Ivica Aračić on “Architecting DLT Financial Infrastructures”
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