Goldman Sachs and BNP Paribas lead $95m investment in Fnality

Fnality, a fintech firm specializing in tokenizing major currencies backed by central bank cash, has raised $95 million in a Series B round led by Goldman Sachs and BNP Paribas.

According to a report on Nov. 14, Fnality, the London-based blockchain payments firm, raised another $95 million in its second round of funding.

Besides Goldman Sachs and BNP Paribas, the fundraising attracted participation from settlement houses such as Euroclear and the Depository Trust and Clearing Corporation. WisdomTree, a global exchange-traded fund firm, and existing investor Nomura also contributed to the investment.

The latest investment round also witnessed continued support from initial backers, including Banco Santander, BNY Mellon, Barclays, CIBC, Commerzbank, ING, Lloyds Banking Group, Nasdaq Ventures, State Street, Sumitomo Mitsui Banking Corporation, and UBS.

UBS and other global banks invested $63.2 million in Fnality in June 2019, aiming to launch a blockchain-based trade settlement platform.

The newly acquired funds are earmarked for developing a 24/7 global liquidity management network. This network is intended to support new digital payment models in wholesale financial markets and the burgeoning tokenized asset markets.

Fnality has indicated that the raise is a foundational step towards the initial launch of the Sterling Fnality Payment System in 2023, pending approval from the Bank of England.

Fnality’s application of blockchain technology enables institutions to utilize central bank funds for various applications. Mathew McDermott, Goldman’s global head of digital assets, highlighted the potential uses of this technology, including “instantaneous, cross-border, cross-currency payments, collateral mobility, and security transactions.”

Founded in 2019 as a UBS-led blockchain initiative, Fnality initially emerged under the Utility Settlement Coin (USC) project. This project aimed at creating digital versions of major currencies for wholesale payments and transactions involving digital securities using an Ethereum-based blockchain.

The move by Goldman Sachs and BNP Paribas reflects a growing interest in blockchain and tokenization among global banks.

In early November, JPMorgan introduced a new programmable payment feature on its JPM Coin platform, targeting institutional investors, further underscoring the increasing integration of blockchain technology in mainstream financial services.