Fnality International is a Financial technology firm founded in 2019 by a consortium of International Banks and an Exchange to create a network of distributed Financial Market Infrastructures (dFMIs) using Blockchain to deliver the means of payment-on-chain for wholesale banking markets.
Fnality International was launched on 3 June 2019 with the completion of an equity Series A round of £50m. Founding Shareholders are Banco Santander, The Bank of New York Mellon, Barclays, Canadian Imperial Bank of Commerce, Commerzbank, Credit Suisse, ING Group, KBC Bank, Lloyds Banking Group, Mitsubishi UFJ Financial Group, Nasdaq , Sumitomo Mitsui Banking Corporation, State Street Corporation and UBS Mizuho Bank joined the original group of 14 founding shareholders on 12 September 2019. Fnality International is an active member of the Ethereum Enterprise Alliance (EEA) Ethereum#Enterprise Ethereum Alliance Fnality International is member of the International Securities Services Association (ISSA).
During conversations on market structure between Hyder Jaffrey from the UBS Innovation team and Robert Sams, CEO of UK-based Blockchain company Clearmatics, the discussion soon narrowed its focus to the need for an on-chain digital payment asset as an essential part of the infrastructure that will support tokenised markets. In September 2015, the Swiss bank launched the Utility Settlement Coin (USC) Research & Development Project UBS#Research and Development. In August 2016, BNY Mellon, Deutsche Bank, Santander, broker/dealer ICAP and the financial services firm NEX (since merged), Barclays, HSBC, State Street, Credit Suisse, MUFG and the Canadian Imperial Bank of Commerce joined the USC project.
Fnality Global Payments will be made up of a series of Fnality Locals which will each run a payment system in a particular currency in accordance with jurisdictional regulations and standards; a Fnality Payments System. In each currency the Fnality Payments System is an independent distributed Financial Market Infrastructure (dFMI) which will operate a private, permissioned distributed ledger to support the creation of a settlement asset for use as an on-chain, digital payment instrument. In respect of a Fnality Payment System, the associated settlement asset is the accounting unit used to digitally represent a Participant’s ownership over a claim, entitlement or interest in respect of funds held in the System Account (The central bank account of the Fnality Payment System). This will be a settlement asset denominated in the fiat currency of the relevant jurisdiction or currency area.
Initially, five currencies are in scope:
– CAD Canadian dollar
– EUR Euro
– GBP Pound sterling
– JPY Japanese yen
– USD United States dollar
Fnality expects the first currency to be approved – followed by go-live with real business activity – by Q1 2021.
- ^“Top banks push ahead with digital coins for 2020”. Financial Times.
- ^“Global banks mint digital coin for fast cross-border transfers”. The Nikkei.
- ^“UBS-Led Group to Launch Blockchain-Based Trade-Settlement Platform”. The Wall Street Journal.
- ^“Banks launch firm to settle transactions, peer-to-peer, on blockchain”. American Banker.
- ^“Japan banks key to new global digital coin”. Asia Times.
- ^“USC launches new cross border payments solution”. Asset Servicing Times.
- ^“Thirteen leading global banks are planning to launch cryptos in 2020”. Business Insider.
- ^“UBS and others to use bitcoin-like token for trade settlement”. Financial News.
- ^“Big banks create Utility Settlement Coin company”. Finextra.
- ^“Utility Settlement Coin gains £50m backing and moves forward with backing of banks”. Global Custodian.
- ^“Mizuho Bank joins utility settlement coin project through Fnality shareholding”. Global Custodian.
- ^“Mizuho joins list of Fnality shareholders”. Institutional Asset Manager.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.