Fnality International, led by former Deutsche Bank managing director Rhomaios Ram, is looking into digitizing several popular fiat currencies. Finality’s main goal is to build an interbank blockchain-based version of the US Dollar, the Canadian Dollar, the euro, the British Pound, and the Japanese yen.
While Mr. Ram’s idea was initially introduced as Utility Settlement Coin (USC), the project is now going under the name Fnality International. Fnality was the result of a Series A equity fundraiser worth around fifty million British pounds (GBP50m).
Fourteen different banks participate as shareholders in the project, among them Banco Santander, BNY Mellon, Barclays, CIBC, Commerzbank, and Credit Suisse.
The idea behind these digitized fiat currencies is still very unclear; however, the primary mission, according to Fnality, will be to:
transform clearing and settlement processes.
Theoretically, the central concept of the digitized fiat currencies is that tokens will be used in daily operations, while fiat currency stored in central banks will back all issued tokens.
This year, one of the largest international banks JPMorgan Chase also announced plans to develop a fiat-backed token of their own called JPM Coin. Contrary to Fnality, JPMorgan is focusing on developing a coin solely for the bank’s operations and is not looking at global digitizing of fiat currencies.
One of the main hurdles before Fnality is the coordination between the decentralized blockchain versions of the fiat currencies and a central bank, which will be responsible for storing the actual fiat backing.
The process of how this coordination is going to be achieved is still very unclear, but it will involve numerous legislative and regulatory procedures. For the moment, the only hint at what Fnality plans to do with the preparation for these procedures was dropped by Robert Sams, CEO of Clearmatics, who stated that the legal arrangements would all happen “inside the system’s blockchain.”
Clearmatics, which recently snatched Tim Swanson, the CEO of Post Oak, is Fnality’s leading partner in the technology sector, which means that the two companies will probably work on the Utility Settlement Coin together. Nevertheless, making digitized tokens for all these currencies is an ambitious goal, with many unknowns paving the way.