The World-First Sterling Fnality Payment System Is A Milestone For Digital Payment Models
Following the successful inaugural transactions on the DLT-based Sterling Fnality Payment System (£FnPS), Fnality International CEO Rhomaios Ram shares insight into the world-first milestone and what it means for wholesale finance and digital asset markets.
This week’s announcement marks the culmination of many years of hard work and significant effort from a range of stakeholders, through the team here at Fnality to our shareholders and inaugural participants, not to mention UK authorities.
We are appreciative of the commitment from both the Bank of England and the Payment Systems Regulator in providing the required framework for the successful completion of the inaugural live payments in this first phase of the new digital FMI and regulated payment system. We look forward to meeting the necessary operational and supervisory expectations for the next managed phase.
What does this milestone mean for the future of digital payment models?
It brings the Fnality vision to life, demonstrating the global potential of our DLT-based payment systems in combining the safety and institutional quality of central bank funds in a systemic wholesale payment system with the innovative functionality and resilience of blockchain technology.
The successful first transactions between Lloyds, Banco Santander and UBS utilising a digital representation of funds at a central bank should provide the confidence to build out the broader multi-jurisdictional vision of a seamless global liquidity management ecosystem. One that empowers new digital payment models for payment (P), payment versus payment (PvP), and delivery versus payment (DvP) transactions in both wholesale financial markets and emerging tokenised asset markets.
This announcement also gives us the confidence to build on our success. It has been described by one of our participants as a ‘once in a generation event’ within the sector, and I want to echo that statement. We have long worked towards a seamless global liquidity management ecosystem, and this milestone takes a major step forward to achieving that vision.
Lloyds, Banco Santander, and UBS are leaders in the finance sector, and their involvement speaks to the broader vision we possess in terms of scaling £FnPS operations in a managed and phased approach. It is a vision that includes establishing FnPSs in other core currencies, for example USD and EUR, and onboarding more participant banks. Beyond that, we want to build out the functionalities, adding value in the form of conditional payments, digital securities settlement, intraday repos, intraday FX swaps, and more.
Heading into 2024, our focus will be placed on realising those scaling up plans and working towards developing those new markets use cases.
This rollout follows quickly from the completion of Fnality International’s Series B funding earlier this month, marking what has been a landmark quarter for us. The success of the funding round in-part 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.
For now, we’re delighted to be able to say that the Sterling Fnality Payment System £FnPS is now connected to CHAPS, is making controlled initial live payments, and joins a group of payment systems that form the UK’s recognised payment infrastructure.
