London-based Fnality, a developer of DLT-based (Distributed Ledger Technology) wholesale payment systems, announced on Tuesday that it has secured a £77.7M (approximately €89M) Series B round of funding.

The round was led by Goldman Sachs and BNP Paribas, with participation from DTCC, Euroclear, Nomura, and WisdomTree. 

There were also additional investments from Series A investors Banco Santander, BNY Mellon, Barclays, CIBC, Commerzbank, ING, Lloyds Banking Group, Nasdaq Ventures, State Street, Sumitomo Mitsui Banking Corporation, and UBS. 

The latest capital infusion brings Fnality’s total capital raised to £132.7M (approximately €152M).

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Funding utilisation

The UK company will use the funds to establish a global liquidity management ecosystem that empowers digital payment models in financial and emerging tokenised asset markets.

It encompasses key milestones such as FnPS launches in key currencies, including USD, strong ecosystem and network growth, and a compelling suite of use cases that will transform payments, settlement, and collateral management in global markets. 

Rhomaios Ram, CEO of Fnality International, says, “Our Series B funding round represents the financial sector’s desire for a central bank money-backed blockchain-based settlement solution that bridges the gap between traditional finance (TradFi) and decentralised finance (DeFi) in wholesale markets. Each Fnality Payment System utilises DLT to provide a 24/7 payment rail with the ability to reduce settlement cycles to real-time, while significantly improving intraday liquidity management and marking significant innovation in the speed, functionality, and resilience of wholesale payments.” 

Fnality: Bridging the gap between mainstream and digital finance

Founded in 2019, Fnality is developing regulated wholesale payment systems based on DLT technology overseen by central banks in key jurisdictions.

In each Fnality Payment System (FnPS), participants use settlement balances in an account directly at the central bank to make wholesale payments in real time. 

These settlement balances are bankruptcy remote and backed 1-to-1 by central bank money in the relevant currency. 

FnPS provides banks with a faster, safer, and more resilient digital payment management system that supports the growing adoption of tokenized assets and marketplaces. 

The Sterling FnPS has previously been recognised by HM Treasury as a systemically important payment system in the UK, bringing it into the regulatory remits of the Bank of England and the Payment Systems Regulator (PSR). 

It made the Sterling FnPS the first regulated DLT-based payment system in the world.   

Fnality’s network of distributed Financial Market Infrastructures (dFMIs) will provide a composable, compelling suite of use cases. 

FnPSs will be launched in other core jurisdictions. It will allow for real-time cross-currency payments 24/7. 

The underlying settlement balances will have central bank money credit quality, essential for novel digital asset markets. It will provide an institutional-grade on-chain cash asset.

FnPS enables participants to manage their cash and collateral from a single, global liquidity pool. 

It is achieved by linking real-time cross-currency payment versus payment (PvP) capability with the ability to settle any delivery versus payment (DvP) transaction atomically and on a real-time basis. 

As a result, participants have the power to manage almost all of their cash and collateral more efficiently.

DLT has demonstrated its potential to facilitate faster, safer, and more efficient exchange of value in global wholesale markets through real-time settlement of tokenized securities, real-time cross-border FX swaps, and real-time repo transactions.

The UK company boasts 17 major institutions as shareholders, including Banco Santander, BNY Mellon, Barclays, CIBC, Commerzbank, Credit Suisse, Euroclear, ING, KBC Group, Lloyds Banking Group, Mizuho Financial Group, MUFG Bank, Nasdaq, Nomura, Sumitomo Mitsui Banking Corporation, State Street Corporation, and UBS.  

What does the investor have to say?

Mathew McDermott, Global Head of Digital Assets at Goldman Sachs says, “Fnality’s solution is a key enabler for the digital asset ecosystem and the company is well-positioned to be at the forefront of payment innovations and institutional adoption of DLT. Fnality’s application of blockchain technology offers a resilient way for institutions to use central bank funds across a wide set of potential use cases, including instantaneous, cross-border, cross-currency payments, collateral mobility, and security transactions.”

Olivier Osty, Head of Corporate & Institutional Banking Global Markets at BNP Paribas says, “Collaborating with innovative companies is at the core of BNP Paribas Global Markets’ strategy and is a key pillar in remaining a meaningful partner to our clients. BNP Paribas’ investment in Fnality illustrates the bank’s continued commitment to exploring and supporting innovative solutions within the banking industry.” 

Frank La Salla, President, CEO, and Director at DTCC, says “As the worlds of TradFi and DeFi converge, DTCC is committed to partnering with industry participants, regulators, and other stakeholders to help introduce the standards and governance needed to accelerate ecosystem growth while ensuring the highest levels of market safety and stability. Our investment in Fnality builds upon our agreement to acquire Securrency and will help foster new digital payment rails that will be essential for establishing a robust digital infrastructure, enabling interoperability and driving adoption of digital assets.”

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