It is not hard to see why there is interest in using distributed ledged technology (DLT) for FX settlement. According to the 2022 Bank for International Settlements (BIS) triennial survey, the daily FX turnover subject to settlement risk was $2.2 trillion – a sum that prompted the bank’s committee on payments and market infrastructures to call for innovative proposals for addressing settlement risk.
But progress has been uneven, to say the least, with the highest profile rejection of the concept coming from the Australian Securities Exchange (ASX). Last November, the ASX announced that it had pulled the plug on a DLT project to replace its legacy clearing and settlement system six years after it was first mooted.
Fnality – a consortium of international banks created to establish a network of decentralized financial market infrastructures – was expected to introduce its sterling payment system last October, but this was subsequently pushed back to the second half of this year to allow more time to complete relevant regulatory and onboarding work.
The firm’s CEO, Rhomaios Ram, says its rollout plans for a fully compliant, accessible and secure network of DLT-based wholesale payment systems are continuing and that it is in detailed discussions with the Bank of England.
“Alongside
