Post trade services provider Euroclear is investing in a blockchain consortium that is exploring using distributed ledger technology for settling trades.
Euroclear, a provider of settlement and custody services for domestic and cross-border securities transactions, on Tuesday announced an investment in Fnality, an international banking consortium building a platform supporting the adoption of tokenized assets.
The partnership aims to provide innovative solutions using distributed ledger technology (DLT) for the settlement of digital securities against digital cash.
Test Phase
A global roll-out is planned this year of Fnality’s distributed Financial Market Infrastructures (dFMIs) network. This will provide near-real-time 24/7 settlement capability for central bank money-like digital cash assets, and facilitate interoperability with other platforms. The aim is to allow banks to significantly reduce intraday liquidity requirements, and unlock the institutional potential of tokenized financial markets.
Recently Euroclear led an experiment using central bank digital currency (CBDC) to settle French government bond transactions using DLT. The project, commissioned by the French central bank, showed it is possible to manage post-trade operations in CBDC, the report said.
BIS Innovation Hub
Euroclear's announcement comes the same day the Bank for International Settlements (BIS) said its innovation hub developed two prototypes for a common international settlement platform for using multiple central bank digital currencies (mCBDCs).
The project, dubbed Dunbar, also showed that financial institutions could use CBDCs issued by participating central banks to transact directly with each other on a shared platform, according to BIS.
«Project Dunbar marks a key milestone in advancing the efficiency of cross border payments globally. The strong collaboration between participating central banks, commercial banks and technology solution providers has established the foundation for developing future ready payment rails,» said Sopnendu Mohanty, the chief fintech officer of the Monetary Authority of Singapore
Swiss Banks Participate
Founded in 2019, Fnality’s shareholders include UBS, Credit Suisse, ING and Nasdaq, among others.
