Today Euroclear announced it has invested in Fnality, the regulated blockchain payments consortium formerly known as the Utility Settlement Coin (USC) and owned by 16 financial institutions, including Nasdaq, BNY Mellon, State Street, and UBS. Euroclear operates Central Securities Depositories (CSDs) across Europe, including Belgium, Finland, France, Ireland, the Netherlands, Sweden, and the United Kingdom.
In October, Fnality plans to launch its first payment currency with pounds sterling deposited at the Bank of England. That makes it a so-called wholesale synthetic central bank digital currency (CBDC) where the purpose is for institutions to use it for settlement, especially for blockchain-based transactions.
This kind of tokenized cash is sometimes seen as the missing piece of the puzzle for many DLT systems that aim to enable faster, more efficient securities transactions with lower risk. Tokenized money enables same-day securities settlement (T0), whether for stocks, bonds or funds, reducing post-trade risks and creating new opportunities such as intraday FX swaps and intraday liquidity savings.
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