According to Blockworks, financial firms Lloyds Banking Group, Banco Santander, and UBS participated in a new payment system launched by blockchain payments startup Fnality. The Sterling Fnality Payment System facilitated live payments in a Fnality-held omnibus account within the Bank of England's real-time gross settlement service (RTGS). The UK central bank announced in April 2021 that it would allow RTGS to interface with more payment systems, including those using distributed ledger technology.
Fnality's latest payments indicate a future utilizing digital models for transactions in both wholesale financial markets and emerging tokenized asset markets. The Sterling Fnality Payment System was recognized as a regulated payment system by HM Treasury in August 2022, bringing it under the jurisdiction of the Bank of England and the UK's Payment Systems Regulator. Fnality UK CEO Angus Fletcher stated that the company's focus in 2024 is on scaling up operations within a managed and approved framework set by the Bank of England and progressing towards unlocking new market use cases.
Fnality raised $95 million last month from investors such as Goldman Sachs and BNP Paribas. The startup creates tokenized versions of major currencies, including US dollars, euros, British pounds, Canadian dollars, and Japanese yen, which are collateralized by cash held at central banks. This development is another example of blockchain technology becoming more prevalent in traditional finance. JPMorgan has been exploring tokenization and blockchain initiatives for years, facilitating a collateral transaction between BlackRock and Barclays in October via a decentralized application and recently unveiling a programmable payments offering for blockchain-based accounts on the permissioned JPM Coin System.
Huang Bo