Fnality delays launch of payment system from this month to 3Q 2023

London-based blockchain firm Fnality is delaying the launch of its Sterling Fnality Payment System (FnPS) to the third quarter of next year, according to a statement from the company shared with The Block.

The decision to delay the launch, which was expected to happen this month, was made in conjunction with the Bank of England to allow further time to work on regulatory and onboarding tasks, said Fnality in the statement. 

“Fnality’s plans to launch in other global markets have not been impacted by this decision,” said the company in the statement. “Fnality is still progressing towards the launch of wholesale payment systems in the US and Europe, with this on track to occur from 2023 onwards.” 

In August, Fnality’s FnPS was brought within the Bank of England’s regulatory purview following a recognition order from the HM Treasury that recognized “FnPS as a systemically important payment system in the UK.” 

What is Fnality?

Formed in 2019 and initially known as Utility Settlement Coin (USC), Fnality aimed to create a network of wholesale blockchain-based payments systems denominated in five currencies: U.S. dollars, Canadian dollars, euros, British pounds and yen. The tokenized currencies would be fully backed by fiat currency held by the relevant central bank. 

In September 2020, Reuters reported that the project had faced delays in its bid for regulatory approval. 

Then in February of this year, Fnality ran a proof-of-concept for issuing a tokenized security on Ethereum, with Fnality handling the payment part of the process. Fnality’s CEO Rhomaios Ram said at the time of the test that the firm was on track to finally launch its payment system in October 2022, thanks in part to the rollout of the BoE’s omnibus accounts. 

High-profile backers

The startup raised £50 million ($56 million) in a Series A in June 2019 when it formed as a commercial entity. The Block recently reported that Fnality is seeking to raise another £50 million in a Series B round. 

“Following on from its successful Series A investment round, Fnality is currently raising funding as part of an ongoing Series B investment round. Full details will be provided by Fnality upon the completion of the round,” a spokesperson for Fnality International told The Block at the time. 

Japanese banking giant Nomura also recently joined the firm’s impressive list of backers, which include UBS, Barclays, Nasdaq, MUFG Bank and State Street, as part of the current round. 

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