Blockchain payments firm Fnality announced on Tuesday (14 November) that it had raised £77.7m ($96.8m) to develop its wholesale on-chain settlement technology.

The Series B funding round was led by Goldman Sachs and BNP Paribas with support from previous investors including Lloyds Group, Santander and ING. It brings the company’s total capital raised to £132.7m.

Fnality’s system is similar to that of the proposed central bank digital currencies (CBDCs) that have been tested extensively over the last year. It aims to use distributed ledger technology – of which blockchain is the most common form – to facilitate the real-time settlement of wholesale financial transactions, which is the appeal of CBDCs for banks and countries.

It would additionally hold its tokens at central banks, backed by the real currency of the state. This is crucial to ensure any tokenised payment system can be trusted by institutions given the failures of so-called ‘stablecoins’ in the past.

Another boon of the project is that it allows near-instantaneous cross-currency transactions, even when exchanges are closed.

The main difference between this and a CBDC is that it is aimed solely at institutions, serving as backbone infrastructure to improve liquidity and reduce costs. Fnality received recognition by the UK Treasury in 2022 and hopes to launch its first payment mechanism, Sterling Fnality Payment System (£FnPS), by the end of 2024 subject to regulatory approval.

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The company completed series A funding in 2019 and has struggled to get off the ground since then. It is also unclear whether this mechanism would be preferred to CBDCs, should they become available. They are being considered by the EU, UK, the US, Canada and Japan – the five nations in which Fnality initially intends to operate – as well as other major economies including Hong Kong.

However, the fact that it has been able to raise the funds at all, particularly from such large investors, is proof that there is confidence in the project. GlobalData research shows that funding related to blockchain in the financial services sector has fallen dramatically from its peak between 2019 and 2020.

Despite that, a recent GlobalData poll found that the technology is still viewed as disruptive. Asked which technologies they thought would change the way they do their jobs over the next three years, 33.2% of 1,216 respondents across GlobalData's network of B2B websites indicated blockchain.

Our signals coverage is powered by GlobalData’s Thematic Engine, which tags millions of data items across six alternative datasets — patents, jobs, deals, company filings, social media mentions and news — to themes, sectors and companies. These signals enhance our predictive capabilities, helping us to identify the most disruptive threats across each of the sectors we cover and the companies best placed to succeed.