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Fnality sees the new Bank of England omnibus accounts as supportive of the opportunity to use tokenized cash assets on next generation payment systems, enabling on-chain wholesale exchange of value. Fnality uses an Etheruem-based permissioned blockchain developed by Clearmatics, that will run on chain payment systems in multiple currencies with a regulated subsidiary in each jurisdiction. When a bank wants to use Fnality tokens to make a payment, it transfers money from its central bank account to the Fnality omnibus account, which then tokenizes it. The bank then uses the tokens to make a payment, and the recipient bank can then opt to convert the received tokens back to central bank money and have it transferred to its own central bank account. Or it could use the tokens for further payments.

Goldman Sachs, BNP Paribas and DTCC joined Fnality's £77.7 million Series B funding round. Formerly called Utility Settlement Coin, Fnality plans to offer a wholesale payment and settlement platform using stablecoins backed by deposits at central banks. So far it's operational only in the U.K., where banks can transfer money from their Bank of England accounts to the Fnality UK central bank account where it's tokenized. Because the money is tokenized it enables instant atomic securities transaction settlement. One of the intended use cases is cross currency payments, but that will need the cooperation of other central banks, which has been slow in coming. https://www.fnality.org/news-views/fnality-international-raises-77.7m-in-series-b-funding-round

Fnality and HQLAX demonstrated together with Banco Santander, Goldman Sachs and UBS, the first cross-chain repo swap pilot across Corda and Enterprise Ethereum, paving the way for the settlement of intraday transactions. This is part of Fnality's mission to provide its participants with a single pool of liquidity to facilitate payments (P), cross-currency payments (PvP) and delivery versus payment (DvP) use cases. This pilot also proves interoperability across the Fnality Payment System and HQLAX's Digital Collateral Registry, bridging Corda and Enterprise Ethereum. Fnality was founded to create a network of decentralised financial market Infrastructures (dFMIs) to deliver the means of payment-on-chain in wholesale banking markets, based on wholesale stablecoins backed by central bank reserves. The HQLAᵡ operating model leverages distributed ledger technology to enable atomic delivery verses delivery (DvD) for baskets of securities residing at multiple custodians.

Fnality and HQLAᵡ have completed end-to-end testing to enable intraday sterling repo settlement on the Eurex Repo F7 platform via their two blockchain networks. They plan to go live in Q4 2024 subject to UK regulatory approvals. Fnality is a UK-regulated systemic payment system and HQLAᵡ operates a digital collateral registry to enable intraday collateral movement. Fnality's settlement instrument is effectively a "synthetic" wholesale central bank digital currency (CBDC) - i..e., a sterling-denominated stablecoin backed by deposits in a Bank of England omnibus account. In conventional repo transactions, the collateral settlement takes two days, but on the Fnality/HQLAᵡ platform, trades can be settled on a atomically intra-day delivery-versus-payment (DvP) basis. https://www.linkedin.com/posts/eurex_eurex-repo-dlt-activity-7208755407740137472-g29d/

London-based Fnality, launched its distributed ledger technology (DLT) based Sterling Fnality Payment System (£FnPS). This digital financial market infrastructure (FMI) and regulated payment system leverage an Omnibus Account held by £FnPS in the Bank of England real-time gross settlement (RTGS) service. The intent is to scale it up to create a seamless global liquidity management ecosystem for payment, payment versus payment (PvP), and delivery versus payment (DvP) transactions in both wholesale financial markets and emerging tokenized asset markets. This is arguably a wholesale central bank digital currency (CBDC) based platform, or at least a synthetic CBDC one, although I'm waiting for more architectural detail to make that determination.

Nomura is investing in Fnality, the interbank payment and settlement platform that uses "synthetic" wholesale central bank digital currency (CBDC) to settle transactions on distributed ledger technology (DLT) based financial market infrastructures (FMIs). (A "synthetic CBDC" is essentially a stablecoin backed by central bank deposits.) Fnality is expected to launch its first such synthetic CBDC in October 2022, pegged to the British Pound and backed by deposits at the Bank of England.

Fnality is pleased to announce key additions to the senior management and advisory team. Gary Chu joins as General Counsel and Adam Clarke as Chief Technology Officer (CTO), with Daniel Heller joining as Head of Regulatory Affairs.

Fnality, formed of a consortium of 14 major banks, is aiming is to create the means of payment on-chain for financial markets by use of its Utility Settlement Coin (USC). The USC is similar to JPMorgan's JPM Coin, but backed by central bank deposits. Fnality is currently seeking approval for such deposits from several central banks, including the Federal Reserve, the Bank of England and the European Central Bank, with the intentions to receive its first green light in Q3 of 2020.

Euroclear has invested in Fnality, the blockchain payments consortium formerly known as the Utility Settlement Coin (USC) and owned by 16 major financial institutions. Euroclear operates Central Securities Depositories (CSDs) across Europe, including Belgium, Finland, France, Ireland, the Netherlands, Sweden, and the United Kingdom. In October, Fnality plans to launch its first payment currency with pounds sterling deposited at the Bank of England. That makes it a so-called wholesale synthetic CBDC where the purpose is for institutions to use it for settlement, especially for blockchain-based transactions.

Three UK Fintechs and two major European banks have successfully conducted a proof of concept showcasing the benefits of distributed ledger technology (DLT) in offering near-instant settlement in capital markets and payments. It was the first cross-chain pilot debt transaction on the public Ethereum and the Fnality Payment System (FnPS). Fnality expects to launch the FnPS, which is to be based on a wholesale synthetic CBDC (sCBDC), sometime in 2022. (However, I'll believe that when I see it, because issuing that sCBDC will require some hard-to-get central bank cooperation.)

The founding shareholders of Fnality comprise: Banco Santander, BNY Mellon, Barclays, CIBC, Commerzbank, Credit Suisse, ING, KBC Group, Lloyds Banking Group, MUFG Bank, Nasdaq, Sumitomo Mitsui Banking Corporation, State Street Corporation, and UBS. Clearmatics continues in its role as the technology partner to Fnality.

"The financial institutions that have invested in Fnality know liquidity management and settlement processes must take a quantum leap to rein in the current inefficiencies, market fragmentation and counterparty risks. These banks accept the need for change and are exploring the potential of technology, by holding tokenised assets on a blockchain to trade and settle with near-instant finality. "

Several of the world's largest banks are investing around $50M in Fnality to create a blockchain-based digital cash system to settle financial transactions. It may be an offshoot of the UBS and Clearmatics "utility settlement coin" project.

The Utility Settlement Coin (USC) project - led by some of the world's largest banks - has announced the creation of a new firm (Fnality International) and closure of an accompanying £50 million Series A financing round.

A group of 11 banks, including NatWest and Deutsche Bank, have been trialling a distributed ledger technology (DLT) based platform for intraday FX swaps. The trial used technology from Finteum, which has been working on a DLT-based intraday FX swaps platform first announced with R3 and Fnality in 2019. During the trial, the banks engaged in simulated trading and discussion sessions. The plan now is to move to live transactions later this year or early in 2022.

Technological development work on the Fnality's "Utility Settlement Coin" initiative has progressed, but it still needs regulatory approval. It hopes to receive that approval by the first quarter of 2021. Initially spearheaded by UBS Group AG, the project has been in the works for more than five years and seeks to create a more efficient way for banks to settle financial transactions. In June 2019 banks including Barclays Plc, Banco Santander and Credit Suisse Group AG announced the creation of Fnality. The company had said it expected the project to be commercialized by 2020. The project is looking to replace some of the cumbersome processes and paperwork involved in transferring value between financial organizations by using wholesale stablecoins denominated in U.S. dollars, yen, euro, sterling and Canadian dollars, and backed by deposits at central banks (ie "synthetic" wholesale central bank digital currency).

The Bank of England dismissed the option of a domestic wholesale CBDC, because the private sector can achieve a similar result themselves. Governor Bailey, at a UK House of Lords Economic Committee meeting, highlighted that banks have existing access to central bank money through its real time gross settlement system. Also, the Bank has introduced an omnibus account that would enable the banks to use digital coins between themselves that settle with the Bank of England. It might also allow nonbanks, like Fnality, to create wholesale digital currency backed by central bank money

Adhara's CBDC Suite brings together the key components needed for a Central Bank to model and manage being a direct issuer of their currency on their own distributed domestic network provides end-to-end tools for managing direct issuance, transfers, limits, value dates, bank onboarding and modelling RTGS connections. Benefits to participants include reduced settlement risk, new liquidity options, increased traceability and transparency and simplified reporting and compliance. Ability for Commercial Banks to connect from day one (via DC Commander), helping Treasuries manage intraday funding and the orchestration of settlement flows for new domestic digital platforms.