Fnality International Inc., incorporated in London on 18th April 2019, finished the first Series A financing round of 50 million pounds ($63,2 million), that will be spent on the further development of USC – Utility Settlement Coin. What does it mean in practice?
Stable cryptocurrencies and blockchain-based fin-techs
It was August 2016 when BNY Mellon, Deutsche Bank, ICAP and Santander joined the UBS Group AG in order to develop a new cryptocurrency together. Now, more than three years later, the news spread that Fnality International Inc., actually including major world banks and corporations such as Barclays of Europe, ING, United States’ State Street, Japan’s Sumitomo Mitsui Banking Corp. as well as Credit Suisse Group, received from the partners above over 63 million dollars in order to develop Utility Settlement Coin. It is not the first, and even not the tenth time, that the blockchain technology is growing rapidly around the world and around the major world banks.
What distinguishes the project from the others? First of all, Utility Settlement Coin (USC*) is not going to be decentralized unlike most cryptocurrencies. Secondly, they will not be able to be traded or mined. The USC will be a coin improving the banking system, pegged to the fiat currency, allowing for shorter transaction times and lower transaction fees. Let us assume that a person named Satoshi would like to send money via bank to a person named Craig, living in Australia. The bank would not need to transfer Japanese yen into Australian dollar. In less than no time, the bank could transfer the right amount of USC to another bank. Then the bank in Australia would instantly pay the money in Australian dollars. Craig might be satisfied, and the bank gains savings.
The great competition
It is not the beginning of using cryptocurrencies and blockchain-based projects to improve the current cross-border payment system. While USC is just developing, the cryptocurrencies world is most interested in JP Morgan launching its own cryptocurrency. Over the years we have been watching the development of the Ripple (XRP) and its cooperation with banks from Japan, Kuwait, United Arab Emirates and many others.
While the cryptocurrencies can have many skeptics as well as enthusiasts, the possibilities of blockchain technology cannot be understated. Although no one truly knows what the Bitcoin price will be next year, the implementation of technology in the banking industry and the economic environment has certainly gained in popularity and is going to become more and more popular.
*Do not confuse this with Ultimate Secure Cash.