Belgium-based Euroclear announced on Monday that it has invested an undisclosed sum in Fnality, which is an international consortium of global banks and financial market infrastructures building payment systems for tokenized assets and marketplaces.
The two companies will work on the development for the settlement of digital securities against digital cash using distributed ledger technologies (DLT). The upcoming solution is expected to increase the speed and efficiency of post-trade operations from primary market issuance to secondary market and collateral trades, along with servicing interest payments.
“The institutional commercialization of DLT is being realized through Fnality’s creation of a network of distributed payment systems using blockchain technology,” said Fnality International’s CEO, Rhomaios Ram.
“As we progress from testing to real-world implementation, welcoming Euroclear Group as an investor into the Fnality International consortium will significantly enhance the diversification of Fnality’s network and expand our industry footprint, especially around Financial Market Infrastructure.”
CBDC and DLT
Euroclear already has a significant stake in blockchain infrastructure development. It recently led a central bank digital currency (CBDC) experiment to settle French government bonds on DLT, which was commissioned by the French central bank. That experiment confirmed the befits of using DLT for managing post-trade market operations in CBDC.
Commenting on the acquisition, Euroclear’s CEO, Lieve Mostrey, said: “As an open financial market infrastructure our approach to innovation has always been to develop services in close co-operation with clients and pioneering networks and infrastructures. We are pleased to be working with Fnality and our clients in shaping a cutting-edge solution on wholesale digital cash and digital securities settlement for the benefit of the whole industry.”
Meanwhile, Euroclear reported a 9 percent year-over-year growth in its operating income in 2021, whereas its business income jumped by 15 percent. It ended the year with a net profit of EUR 467 million, which is a rise of 8 percent.
Last year, the financial services company acquired MFEX Group, a global digital fund distribution fund.
