- Latest funding round follows Series A of £55m in June 2019
- Lead investors include Goldman Sachs and BNP Paribas
14 November 2023, LONDON – Fnality – the FinTech bringing together the safety and institutional quality of central bank money with the innovative functionality and resilience of blockchain technology – today announced a £77.7m Series B funding round. This 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 culmination of this latest round brings Fnality's total capital raised to £132.7m as it readies for the commencement of initial Sterling Fnality Payment System (£FnPS) operations in 2023, subject to regulatory approval.
Fnality’s latest funding will be utilised to continue progress towards the establishment of a world-first global liquidity management ecosystem that empowers new digital payment models in both wholesale financial markets and emerging tokenised asset markets. This 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.
Several landmark proofs of concept have already demonstrated many of these capabilities, including for real-time settlement of tokenised securities, real-time cross-border FX swaps, and real-time repo transactions, each of which evidences the potential inherent in leveraging distributed ledger technology (DLT) to facilitate traditional financial activity and achieve faster, safer and more efficient exchange of value in global wholesale markets.
The successful execution of such activity will result in the mutually beneficial use of innovative technology to streamline processes, reduce costs, and ensure regulatory compliance while offering new products and access to new markets. As a growing industry-backed consortium with both substantial digital assets pedigree and longstanding engagement with key central banks and regulators, Fnality is well placed to sit at the intersection of these converging markets, empowering both sides in the process.
Rhomaios Ram, CEO of Fnality International, comments: "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.”
Frank La Salla, President, CEO and Director at DTCC, comments: “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.”
Olivier Osty, Head of Corporate & Institutional Banking Global Markets at BNP Paribas, comments: “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.”
Mathew McDermott, Global Head of Digital Assets at Goldman Sachs, comments: “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. We are pleased with our investment and are looking forward to the transformative impact Fnality brings.”
Broadhaven acted as financial advisor to the round, and Sullivan & Cromwell acted as legal counsel.
The PHA Group
Founded in 2019, Fnality is developing a series of regulated, DLT-based wholesale payment systems in key jurisdictions, each overseen by its home central bank. 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 offers banks a faster, safer, and more resilient system for managing digital payments, and supports the growing industry adoption of tokenised 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). This 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. The launch of FnPSs in other core jurisdictions will enable real-time cross-currency payments on a 24/7 basis, with the central bank money credit quality of the underlying settlement balances providing the missing ingredient for novel digital asset markets: an institutional-grade on-chain cash asset. With the linkage of a real-time, cross-currency payment versus payment (PvP) capability in these assets to the ability to settle any delivery versus payment (DvP) transaction atomically and on a real-time basis, participants in FnPS are empowered to manage virtually the entirety of their cash and collateral from a single, global pool of liquidity.
Fnality’s shareholders comprise: Banco Santander, BNP Paribas, BNY Mellon, Barclays, CIBC, Commerzbank, The Depository Trust & Clearing Corporation (DTCC), Euroclear, Goldman Sachs, ING, KBC Group, Lloyds Banking Group, Mizuho Bank, MUFG Bank, Nasdaq Ventures, Nomura, Sumitomo Mitsui Banking Corporation, State Street Corporation, WisdomTree, and UBS.
For more information, please visit www.fnality.org