Fintech Startup Fnality Raises $95M in Funding Led by Goldman and BNP Paribas

2:11 pm
November 14, 2023
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## Fintech Startup Fnality Secures $95M in Funding Led by Goldman and BNP Paribas

Fnality, a fintech firm at the forefront of developing tokenized versions of major currencies collateralized by central banks’ cash, has successfully raised $95 million in its Series B funding round. Major financial institutions like Goldman Sachs Group Inc and BNP Paribas SA are among the key investors leading the investment.

### Fnality Funding and Key Participants

The investment round also witnessed participation from prominent entities such as DTCC, Euroclear, Nomura, and WisdomTree. Notably, several banks that previously supported Fnality’s $63 million fundraise in 2019 have reaffirmed their commitment to the project. These institutions include Banco Santander SA, BNY Mellon, Barclays Plc, Lloyds Banking Group Plc, and UBS Group AG.

With the newly secured funding, Fnality aims to further its groundbreaking work in the tokenization of fiat currencies backed by central bank cash. The support from leading financial institutions reaffirms the industry’s recognition of Fnality’s pivotal role in bridging the gap between traditional finance and the emerging decentralized finance landscape.

Tokenization of traditional finance assets on permissioned or public blockchains has become a significant topic in the financial industry. Fnality is recognized as a pioneer in bringing cash onto the blockchain to achieve Delivery versus Payment (DvP) in wholesale banking through shared ledgers.

Rhomaios Ram, CEO of Fnality International, highlighted the importance of the Series B funding, stating: “Our Series B funding round 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 decentralized finance (DeFi) in wholesale markets.”

Goldman Sachs head of digital assets, Mathew McDermott, further emphasized Fnality’s role as a “key enabler” in the growing trend of tokenization. He emphasized Fnality’s application of blockchain technology as a resilient solution for institutions, enabling them to utilize central bank funds for various use cases, including instantaneous cross-border payments, collateral mobility, and security transactions.

### Fnality’s Path to Tokenization

Fnality initially gained attention as a consortium of banks, led by UBS, exploring the integration of blockchain technology and tokenized assets to settle trades. Initially known as the Utility Settlement Coin (USC) project, it faced regulatory delays in its pursuit of approval.

However, in response to the evolving regulatory landscape, Fnality modified its strategy. When the Bank of England announced that innovators could access central bank funds through omnibus accounts, Fnality promptly applied. The firm completed a proof-of-concept for issuing a tokenized security on the Ethereum blockchain in February 2022, with Fnality overseeing the payment aspect of the process.

The success of Fnality’s funding marks a significant stride towards its mission to revolutionize wholesale banking through the tokenization of major currencies. As the fintech landscape continues to evolve, Fnality’s innovative approach to blockchain-based settlement solutions is poised to shape the future of financial transactions.

### FAQs

#### What is Fnality’s focus?
Fnality is a fintech firm primarily focused on building tokenized versions of major currencies collateralized by cash held at central banks.

#### Who led the investment in Fnality’s Series B funding round?
Goldman Sachs Group Inc and BNP Paribas SA were the key investors leading the investment in Fnality’s Series B funding round.

#### What are some of the use cases enabled by Fnality’s blockchain-based solutions?
Fnality’s blockchain-based solutions facilitate various use cases, including instantaneous cross-border payments, collateral mobility, and security transactions.

#### What was Fnality’s initial project known as?
Fnality initially gained attention as the Utility Settlement Coin (USC) project, which explored the integration of blockchain technology and tokenized assets to settle trades.

#### What regulatory change prompted Fnality to modify its strategy?
When the Bank of England announced that innovators could access central bank funds through omnibus accounts, Fnality promptly modified its strategy.


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