Blockchain powering a decentralised network of payment-on-chain in the wholesale banking market


Founded in 2019, Fnality is a FinTech bringing together the safety and institutional quality of central bank money with the innovative functionality and resilience of blockchain technology. Their goal is to develop a global liquidity management ecosystem that empowers new digital payment models in both wholesale financial markets and emerging tokenized asset markets.

Fnality has been building a type of “private CBDC” made for wholesale banking transactions, where all the tokenized funds are backed by central bank currencies, and settlement happens in real time. 

Who is Fnality?

Fnality International started its life as a pure research project to better understand how DLT could change financial markets. The project grew to include a consortium of financial institutions who wished to explore how Blockchain and Distributed Ledger Technology (DLT) could use tokenised cash assets to settle securities trades. In so doing it sought to alleviate many of the FMI challenges. 

The initiative became known as the Utility Settlement Coin (USC) Project, with a core objective; the creation of a peer-to-peer digital cash asset to settle tokenised transactions with finality.  

The payment solution needed to be:  

  • Available in multiple currencies to allow for greater efficiencies in managing fragmented liquidity.
  • Capable of inter-operating across multiple business platforms, whether to support PvP or DvP settlement of financial transactions.
  • A digital representation of money held in a central bank account to ensure banks could rely upon its value as they would fiat currency.

Having established that these aims were both theoretically and technically possible, the consortium members took a step toward building the system, to enable ‘on-chain’ payment, by investing in the creation of Fnality

“Tokenized Money”

Tokenization has become a significantly important development for digital payments in the banking sector for using decentralized ledger technology. Assets, such as currency, are represented as digital currencies, to enable banks to take advantage of blockchain technology. Due to the fact that Blockchain technology is protected by cryptographic keys, this makes them almost tamperproof and provide near-instant transactions, alongside an auditable record of historical transactions – this makes them perfect for the financial industry, and for the basis of “Digital Money”

Using blockchain technology, financial companies can reduce the time it takes to make international finance transfers of currency and assets from days or hours to minutes. It also reduces the amount of paperwork and human touch required and lessens the potential for error, because the record of the token transaction occurs on the blockchain network, which is immutable and can be audited afterwards

Benefits & Outcomes
  • Reduced counter-party and credit risk
  • Reduced operational risk
  • Efficient liquidity management
  • An ability to move resources from risk mitigation to business growth
  • The reduction in systemic risk; a key focus for central banks globally

“Fnality has been architected along the lines of the specific PFMI requirements; operational resilience and capability, the functionality and transparency for financial institutions to manage their risk – all pointing towards enhanced financial stability and market efficiency”

“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.”

Further Info

Fnality completes ‘world’s first’ blockchain payments at Bank of England

On 14th December 2023, Fnality, announced that shareholders Lloyds Banking Group, Santander and UBS had completed the “world’s first” live transactions that digitally represent funds held at a central bank.

“The creation of a new systemically important global payment system is a once in a generation event,” said Hyder Jaffrey, managing director for principal investments and strategic ventures at UBS.

The inaugural live payments were made in (£)sterling using an “Omnibus Account” at the Bank of England, introduced by the central bank in 2021 to spur innovation and competition in payments by allowing an operator to pool funds of participants. Backing transactions with central bank money provides reassurance for institutions making payments.


The company has been live since 2019 and the first “blockchain payment” with the Bank of England was made in December 2023

Researched by Antony December 2023

© Antony Welfare 2024