Last week, there were two major announcements in the world of blockchain and finance. Fnality, a long-running enterprise blockchain initiative, closed a £77.7m funding round, led by Goldman Sachs and BNP Paribas. This is a significant milestone for the project, which has been working on building new rails for wholesale payment since 2015. The goal of Fnality is to provide a real-time wholesale payment system for some of the world’s leading currencies, including GBP, EUR, USD, JPY, and CAD. The funding round, which involved major financial institutions as investors, highlights the institutional appeal and the potential impact of the project.
J.P. Morgan also made a major announcement last week by tokenizing funds in collaboration with alternative asset manager Apollo Global as part of the Monetary Authority of Singapore’s ‘Project Guardian’. The goal of the project is to establish policy guidelines and a framework for regulated decentralized finance (DeFi). The initiative involved tokenizing fund vehicles on several permissioned blockchain networks and exploring the possibilities of using tokenized assets with smart contracts to simplify the portfolio management process and bring greater liquidity to alternative assets.
Both of these announcements demonstrate the ongoing progress and impact of enterprise blockchain initiatives in redefining traditional finance. Fnality’s long journey to bring its platform for GBP payments to life illustrates the challenges of bringing blockchain-based systems into highly regulated financial markets. The significant investments in Fnality have been dedicated to working with regulators to enable the payment network to operate within legal frameworks, which is a critical aspect of the project.
On the other hand, J.P. Morgan’s proof of concept exercise with tokenizing funds shows the potential for blockchain technology to simplify portfolio management and increase access to alternative investments while reducing the need for cash in portfolios. The use of private permissioned blockchain networks in the project reflects the regulatory considerations and the long road ahead for these technologies in regulated finance.
Overall, these announcements highlight the progress and opportunities for blockchain technology in redefining finance. While there are still challenges and regulatory aspects to consider, the potential for greater efficiency and innovation in the financial industry is evident. Change in the provision of financial services underpinned by blockchain technology is happening, and there is no shortage of opportunities for it to bring about positive impacts across the industry. However, it’s important to recognize that it will take time and collaborative efforts to navigate the complexities of regulation and adoption in the space.