Tokenized payments receive earmarking through Fnality's launch; £20 million in funding unveiled
Fnality International Introduces Earmarking Feature for Institutional Settlement Solutions
Fnality International, a fintech company backed by 20 of the world's largest global financial institutions, has announced a new feature called earmarking of funds for securities transactions. This innovative solution is designed to enhance institutional settlement solutions by leveraging tokenized central bank reserves.
The earmarking feature, which is now available on Fnality's 24/7 instant payments system, enables institutions to designate specific portions of tokenized reserves for particular settlement obligations or instructions. This ensures that funds are reserved and can only be used for intended settlement purposes, thereby reducing settlement risk in large-value cross-border transactions.
John Whelan, Managing Director of Digital Assets at Banco Santander, noted that the earmarking feature helps enable atomicity in institutional blockchain-based applications. Lloyds Bank, Santander, and UBS were involved in developing the programmable functionality of Fnality.
The earmarking function allows Fnality's platform to lock or reserve tokens representing central bank money exclusively for a predetermined payment or settlement flow. It also enables atomic and programmable payments, meaning the transfer of funds can be automated and conditional based on agreed criteria. Furthermore, it supports institutional workflows that require strong certainty over fund availability and allocation in a tokenized system integrated with central bank digital currencies (CBDCs).
Fnality did not earn any revenue in its first full year of operation in 2024, but had almost £34 million in cash on hand at the year end. Despite this, the company lost £28.9 million for the year pre-tax in 2024, fractionally more than in 2023.
In addition to the earmarking feature, Fnality International has also disclosed a £20 million convertible loan note issued on 30 September 2024, which will convert to equity upon completion of Series C funding. This follows a £20 million convertible loan note secured by the company last year. Fnality raised £50 million in Series A funding in 2019 and £77.7m in Series B in 2023. Notable investors include Goldman Sachs, BNP Paribas, and DTCC.
Fnality is planning to launch a dollar version of its settlement system, and its biggest goal is expanding FX settlement, with plans to go online for a second currency. The name Fnality XB suggests plans for cross-border payments, aligning with the company's mission to enable programmable, tokenized payments on a shared distributed ledger technology (DLT) infrastructure, aimed at major financial institutions and central banks for safer, faster, and more transparent settlement.
[1] Source: Fnality International's official website and various financial news outlets.
- Fnality International, backed by major global financial institutions, has introduced an earmarking feature for institutional settlement solutions, designed to leverage tokenized central bank reserves and reduce settlement risk in large-value cross-border transactions.
- John Whelan, Managing Director of Digital Assets at Banco Santander, suggests that the earmarking feature enables atomicity in institutional blockchain-based applications, a functionality developed collaboratively with Lloyds Bank, Santander, and UBS.
- Fnality's platform locks or reserves tokens representing central bank money exclusively for predetermined payment or settlement flows, supporting workflows that require strong certainty over fund availability in a tokenized system integrated with central bank digital currencies (CBDCs).
- Fnality International aims to launch a dollar version of its settlement system and expand FX settlement, with plans to go online for a second currency, aligning with its mission to enable programmable, tokenized payments on a shared distributed ledger technology (DLT) infrastructure for major financial institutions and central banks, ultimately aiming for safer, faster, and more transparent settlement.
