# Fnality International - Digital Central Bank Money Settlement Systems

> Fnality International develops DLT-based payment systems for real-time wholesale settlement with digital representation of central bank money to make cross-border payments more efficient. The consortium of 14 global banks (including Santander, HSBC, Barclays and UBS) has already technically launched the Sterling Fnality Payment System as the first step towards a global network and is in the pilot phase with regulatory approval. The system enables near-instant settlement of payments between financial institutions and reduces counterparty risk through the use of Utility Settlement Coins (USCs) that represent fiat currencies on a blockchain.

**Sector:** Tertiary sector · **Industry:** Fintech · **Organisation:** Fnality International (Konsortium globaler Banken, darunter Santander, HSBC, Barclays und UBS) · **Maturity level:** Pilot

Canonical URL: https://www.sapientblock.com/en/use-cases/fnality-international-zentralbankgeld-digital-transferieren

## Documentation status

- **Project status:** Pilot
- **Evidence:** Evidence high
- **Editorial review:** Ufuk Avci, 15 April 2026

## Description

Fnality International was founded in 2019 to enable tokenised central bank money for institutional wholesale payment traffic. The Sterling Fnality Payment System (£FnPS) started controlled live operation in December 2023 and was recognised by HM Treasury as a systemically important payment system — the world’s first regulated DLT-based wholesale payment system. Funds at Fnality are backed 1:1 by deposits at the Bank of England.

Fnality originated from the Utility Settlement Coin (USC) project (2019, $67 million initial funding). Core concept: Banks deposit funds at the Bank of England in an omnibus account; Fnality tokenises these reserves as digital monetary units. These tokens can be transferred between banks in real time, 24/7, atomically — without intraday liquidity buffers. Key feature: Earmarking — funds can be reserved for specific purposes (e.g. delivery-versus-payment for tokenised securities) and are only released upon fulfilment of the condition. In October 2024, Santander, Lloyds and UBS conducted the first uncleared bilateral margin payments via £FnPS — the first use of a fully regulated DLT system for interbank margin settlement. Fnality shareholders: Banco Santander, BNY Mellon, Barclays, BNP Paribas, CIBC, Commerzbank, DTCC, Euroclear, Goldman Sachs, ING, KBC, Lloyds, Mizuho, MUFG, Nasdaq, Nomura, SMBC, State Street, UBS, WisdomTree. Series C (September 2025): $136 million, led by WisdomTree, BofA, Citi — total funding over $310 million.

## Benefits

- Improved liquidity optimisation and treasury management through 24/7 availability of the settlement system and real-time transparency of payment status.
- Drastic reduction of settlement times from days to near real time by using digital central bank money tokens on a blockchain platform.
- Significant cost reduction in cross-border wholesale payments by eliminating intermediaries and complex correspondent banking relationships.
- Significant reduction of counterparty risk through the use of digital central bank money instead of traditional bank guarantees.
- Employees can focus on more strategic tasks as routine settlement processes are automated and require less manual monitoring.

## Challenges

- Companies must invest significant resources in system integration and employee training to successfully implement the new blockchain-based settlement infrastructure.
- The high technical complexity of integration with existing RTGS systems requires substantial IT investments and specialised expertise.
- Regulatory uncertainties and the need for approval from various central banks can delay global scaling.
- Employees must develop new technical skills in handling blockchain technology and digital central bank money systems, requiring intensive training.

## Technology foundation

Fnality International uses a private, permissioned blockchain technology (Distributed Ledger Technology) in collaboration with technology partner Clearmatics to create digital representations of central bank money. This technology is particularly suitable as it meets the high security and compliance requirements of the banking sector and enables seamless integration with existing RTGS systems (Real-Time Gross Settlement).

## Sources

- [USC continues to evolve](https://fnality.com/news/usc-continues-to-evolve)
- [Lloyds, Santander, UBS use Fnality tokenized central bank money for margin settlement](https://www.ledgerinsights.com/lloyds-santander-ubs-use-fnality-tokenized-central-bank-money-for-margin-settlement/)
- [How Fnality Works](https://fnality.com/how-it-works)
- [Fnality International Official Website](https://fnality.com)