Fnality, an international consortium of global banks and financial market infrastructures, focuses on building regulated payment systems to support the adoption of tokenised assets and marketplaces.
Fnality aims to bring central bank money in a digital tokenized form with near-real-time 24/7 settlement capability to allow banks to significantly reduce their intraday liquidity requirements, and unlocking the institutional potential of tokenised financial markets.
In recent years, market participants have demonstrated a wider acceptance of DLT and its potential for significantly transforming global capital markets. Regulators are starting to create the conditions to allow for its use in securities markets, such as the EU DLT pilot regime. With DLT moving from experimentation to commercialisation, industry-supported and Central Bank supervised solutions for digital cash on DLT, like Fnality are becoming increasingly important.
The Bank of England (BoE) recently announced the launch of a new omnibus account model to enable its real-time gross settlement (RTGS) service to interface with a wider range of innovative payment systems, including those using DLT. Effectively, an operator of a payment system can hold funds in the omnibus account to fund its participants’ balances with central bank money; and support a wide range of high-value payments, including a commercial bank buying government bonds. Fnality has applied for the BoE omnibus account and is due to go live with its Pound Sterling Fnality Payment System in October 2022.
“As an open financial market infrastructure our approach to innovation has always been to develop services in close co-operation with clients and pioneering networks and infrastructures. We are pleased to be working with Fnality and our clients in shaping a cutting-edge solution on wholesale digital cash and digital securities settlement for the benefit of the whole industry.”
Lieve Mostrey, Chief Executive Officer, Euroclear group
As we develop our future Distributed Ledger Technology (DLT) capabilities, we are partnering with Fnality with the intention to provide an innovative solution for the settlement of digital securities against digital cash on DLT. The solution aims to increase speed and efficiency for a range of post-trade operations from primary market issuance to secondary market and collateral trades, and servicing interest payments.
Fnality’s founding shareholders are: Banco Santander, BNY Mellon, Barclays, CIBC, Commerzbank, Credit Suisse, ING, KBC Group, Lloyds Banking Group, Mizuho Bank, MUFG Bank, Nasdaq, State Street Corporation, Sumitomo Mitsui Banking Corporation, and UBS.