Fnality: 10 Key Things You Must Know

Overview

Fnality is a groundbreaking fintech company pioneering the future of wholesale payments by leveraging blockchain and distributed ledger technology (DLT). Founded in 2019 and headquartered in London, Fnality has developed the world’s first fully regulated, DLT-based payment system backed directly by central bank money. Its aim is to revolutionize the financial ecosystem by enabling real-time, peer-to-peer settlements that run 24/7, thereby enhancing liquidity, reducing risks, and introducing unprecedented efficiency in wholesale banking markets. This article explores ten essential facets of Fnality, shedding light on its innovative payment systems, regulatory milestones, broad financial consortium backing, and its role in the emerging tokenized finance landscape.

1. Origin and Foundation of Fnality

Fnality originated from a multi-year research initiative initially called the "Utility Settlement Coin," developed to explore how DLT could revamp traditional financial settlement systems. Established in 2019 in London, Fnality was formed as an international consortium of major global banks and financial market infrastructures. This collaborative foundation reflects Fnality’s vision to address systemic inefficiencies in wholesale markets by creating a decentralized, regulated financial market infrastructure that facilitates real-time central bank money settlements using blockchain technology.

2. The Sterling Fnality Payment System (£FnPS)

The Sterling Fnality Payment System is a world-first: the first fully regulated payment system based on distributed ledger technology. Launched as a milestone in centralized digital money settlements, £FnPS enables wholesale market participants to conduct instantaneous, peer-to-peer transactions backed 1:1 by funds held at the Bank of England (central bank). This system operates around the clock and provides atomic settlement, ensuring that payments and deliveries occur simultaneously without counterparty risk, reshaping the landscape for real-time financial market transactions.

3. Consortium and Shareholder Support

Fnality is backed by a formidable consortium of over 20 leading financial institutions globally, including Banco Santander, BNP Paribas, Barclays, BNY Mellon, Credit Suisse, ING, Lloyds Banking Group, MUFG, State Street, and UBS among others. This broad shareholder base embodies a collective industry commitment to drive innovation in wholesale payments, with these institutions collaborating to shape the future of market infrastructure, liquidity optimization, and cross-border settlement efficiency.

4. Regulatory Milestones and Central Bank Engagement

Fnality operates under full regulatory compliance and supervises all its payment systems alongside major central banks, including the Bank of England. The company has been granted access to central bank accounts (omnibus accounts) allowing it to hold funds that represent participants' balances in central bank money. In the U.S., Fnality is pursuing regulatory approval, including an innovation bank charter in Connecticut and hopes to interface with the Federal Reserve. These regulatory achievements underpin Fnality’s credibility and enable it to operate as a trusted settlement infrastructure in the digital era.

5. Real-Time Atomic Settlement and 24/7 Availability

A key feature of Fnality’s payment systems is real-time atomic settlement, which guarantees that transactions are settled instantly and simultaneously—payment versus payment (PvP) or delivery versus payment (DvP). Unlike traditional settlement systems limited by business hours and slower processes, Fnality's network functions continuously, enabling global financial markets to move money securely, efficiently, and without delay anytime, any day, optimizing liquidity usage and reducing counterparty risk.

6. Innovation with Programmable Money and Earmarking

Fnality has introduced programmable payments through a novel feature called "Earmarking." This technology brings smart contracts into a digital representation of central bank money, allowing funds to be allocated programmatically to specific purposes within payment workflows. This innovation supports complex financial transactions such as real-time repurchase agreements, cross-border FX swaps, and tokenized securities settlements. Earmarking enhances automation, transparency, and the functional versatility of wholesale payments.

7. Integration with FX and Post-Trade Infrastructure

Fnality has expanded its capabilities by integrating with foreign exchange payment-versus-payment (PvP) networks like OSTTRA and Baton Systems, combining intraday liquidity netting with 24/7 settlement availability. It also collaborates with post-trade market infrastructure providers such as Broadridge and the Depository Trust & Clearing Corporation (DTCC), facilitating seamless settlement services that intersect digital assets, tokenized securities, and traditional finance. These partnerships expand Fnality’s network effect and its ability to support complex, cross-border financial transactions.

8. Expansion and Multi-Currency Strategy

While the initial focus has been on the Sterling Fnality Payment System, Fnality is actively working to extend its regulated payment systems to other major currencies, including the U.S. dollar, with ongoing regulatory submissions and development. The roadmap envisions a global network of interoperable DLT payment systems capable of facilitating instant cross-currency settlements, advancing the liquidity and efficiency of international financial markets and tokenized asset ecosystems.

9. Recent Funding and Market Confidence

Fnality has attracted substantial investment reflecting confidence in its vision and technology. In 2023, it raised £77.7 million in a Series B funding round, followed by a $136 million Series C round in September 2025, with major backers including Bank of America, Citi, WisdomTree, and Temasek. These funds are dedicated to expanding Fnality’s blockchain payment infrastructure, liquidity management tools, and support for the settlement of tokenized securities and stablecoins, propelling Fnality’s role as a foundational pillar in digital wholesale finance.

10. Impact on the Future of Tokenized Finance and Digital Assets

Fnality is positioned at the forefront of the transition to tokenized financial markets where assets are represented digitally on blockchains. By providing a regulated, central bank-backed settlement rail that supports programmable money, atomic settlement, and interoperability with legacy and new finance systems, Fnality enables institutional participants to unlock the potential of tokenized securities, digital cash, and stablecoins. This new infrastructure promises reduced settlement risk, increased transparency, and enhanced capital efficiency, potentially reshaping global capital markets and the broader digital finance ecosystem.

Conclusion

Fnality represents a transformative leap in wholesale financial infrastructure, combining the rigor of central bank money with the innovation of blockchain technology. Its fully regulated, real-time, and programmable payment systems respond to longstanding market inefficiencies by enhancing liquidity, reducing risks, and enabling seamless 24/7 settlement across multiple currencies. Backed by a diverse global consortium and robust regulatory engagement, Fnality is paving the way for a new era of tokenized finance and digital asset markets. As the financial world evolves, Fnality's vision challenges us to rethink how money moves and how global financial markets can operate faster, safer, and more efficiently.