The Committee on Payments and Market Infrastructures (CPMI) defines interoperability as follows:

“The technical or legal compatibility that enables a system or mechanism to be used in conjunction with other systems or mechanisms.”

When the Distributed Ledger Technology (DLT) community talks about interoperability, they mean that two or more systems can work seamlessly with each other. What they are talking about is enabling cross-chain atomic swaps – swaps in which either both legs happen or neither of them do. Deriving from the Greek ‘atomos’, the word roughly translates to ‘indivisible’. It is indivisibility which ensures both legs of DLT-enabled financial transactions can be actioned,...

• Latest funding round follows Series A of £55m in June 2019
• Lead investors include Goldman Sachs and BNP Paribas

UK FinTechs Fnality, Nivaura and Adhara collaborate with NatWest and Santander to execute first cross-chain pilot debt transaction on public Ethereum and Fnality Payment System

Digitisation and new technologies, like DLT and blockchain, are rapidly innovating the wholesale financial market industry.

Every day a new type of asset becomes ‘tokenised’ (i.e., represented digitally on a distributed ledger), from financial products (e.g., repurchase agreements, fixed income, equities) to any sort of tradable assets (e.g., real estate, IP royalties… forests!) shaping the future tokenised financial markets and potentially creating novel business cases whose magnitude is still hard to define.

At the same time, execution of transactions in existing markets, such as equities, fixed income, FX and derivatives have seen incredible digital automation.

However, post-trade...

Fnality's Product Manager, Simone Cortese, discussed the future of DLT ecosystems and why interoperability holds the key to success at the HQLAx Conference on Transforming the Securities Finance Industry via Distributed Ledger Technology. He highlights his key takeaways and insights in this blog post.

Traditionally, the functions of financial market infrastructure (which includes payment systems) have been centrally administered and operated by a single entity. There is a growing movement within the wholesale financial market towards decentralisation in order to reduce reliance on centralised intermediaries and “unlock billions in capital and liquidity”. Decentralisation is at the core of our design principles at Fnality. Both the technology underpinning the Fnality Payment System (‘FnPS’) and our organisational design are based on the concept of decentralisation. There will be no ‘single point of failure’ should a server go down or ‘single point of attack’ from malicious actors...

At the start of this year, I wrote a post speculating that 2021 may be the year of dFMI. Happily, there has been some significant progress on this front, such as the creation of an Omnibus Account Structure by the Bank of England and a clarification of the usage of ECB technical accounts paving the way for pre-funded payment systems. However, nearly three quarters of the way through the year, I admit I may have missed an important stage of evolution: the speed of stablecoin acceptance!

Bank of England publishes an omnibus accounts policy to enable innovative payment systems