Fnality International, a fintech company that aims to use blockchain technology to facilitate cash transfers between financial institutions, announced on Monday that it had raised approximately $95 million in a Series B funding round. The round was led by Goldman Sachs and BNP Paribas, two of the world’s largest banks.
Fnality’s vision is to create a global network of digital currencies that are backed by cash held at central banks. These digital currencies, called Fnality Payment Systems (FPS), would enable instant and cost-efficient cross-border payments and settlements for various use cases, such as trade finance, capital markets, and corporate treasury.
Fnality’s platform would leverage blockchain technology to ensure the security, transparency, and resilience of the transactions. Blockchain technology is a system of distributed ledgers that can record and verify data without the need for intermediaries or central authorities.
Fnality’s FPS would be compliant with the regulatory and legal frameworks of each jurisdiction where they operate. Fnality plans to launch FPS for five major currencies: US dollar, euro, British pound, Canadian dollar, and Japanese yen.
Fnality’s Progress: A Series of Milestones and Challenges
Fnality was founded in 2019 by a consortium of 16 financial institutions, including Credit Suisse, UBS, and Deutsche Bank. The company raised $63 million in its initial funding round, which was also led by Goldman Sachs and BNP Paribas.
Since then, Fnality has achieved a series of milestones and faced some challenges. Some of the milestones include:
- Obtaining regulatory approval from the UK Financial Conduct Authority (FCA) in 2020
- Completing a successful proof-of-concept with Clearstream, a post-trade services provider, in 2021
- Partnering with ConsenSys, a blockchain software company, to develop its technology platform in 2021
- Expanding its shareholder base to include DTCC, Euroclear, Nomura, and WisdomTree in 2021
Some of the challenges include:
- Delaying the launch of its first FPS from 2020 to 2022 due to the COVID-19 pandemic and regulatory hurdles
- Facing competition from other initiatives that aim to digitize cash and payments, such as JPM Coin, Diem, and CBDCs
- Navigating the complex and evolving landscape of blockchain regulation and standardization
Fnality’s Future: A Promising Step Towards a Digital Economy
Fnality’s Series B funding round reflects the growing interest and investment in blockchain technology and digital assets from traditional financial institutions. The round also demonstrates the confidence and support that Fnality has from its shareholders and partners.
Fnality’s CEO, Rhomaios Ram, said in a statement: “We are delighted to have completed our Series B funding round, which is a testament to the strength of our vision and the support of our shareholders. We are now focused on delivering our platform and launching our first FPS as soon as possible.”
Mathew McDermott, global head of digital assets at Goldman Sachs, said in a statement: “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. We are excited to continue supporting Fnality’s development and innovation in this space.”
Fnality’s Series B funding round is a promising step towards a digital economy that is more efficient, inclusive, and sustainable. Fnality’s platform could potentially transform the way cash and payments are handled in the financial system, and pave the way for new opportunities and innovations.