11 September, 2020
Last June, Barclays, Banco Santander, Credit Suisse Group AG and ten other major banks in the world announced a $ 63 million investment in the Utility Settlement Coin project. The USC project partners became the founding shareholders of a new commercialization firm called Fnality International.
As previously reported , the USC platform aims to facilitate the issuance of blockchain-based currencies by commercial and central banks around the world. It was planned that the issuance of digital currencies will be launched this year. However, it was decided to postpone the implementation of the project until at least 2021.
The project, called Fnality, was developed by the Swiss investment bank UBS Group AG. The company managed to attract other banks to the development of the initiative, because they all will benefit from achieving the ultimate goal: faster and cheaper settlements.
Settlement is an often time-consuming process by which financial institutions clear transactions so that all participants in the payment system receive their money. Basically, this involves transferring money from the buyer's account to the seller's account, minus fees for credit card operators and banks.
Originally known as the Utility Settlement Coin, the Fnality project was supposed to make this whole process much easier and faster.
The specific details of the project and regulatory requirements are still being worked out. According to a Reuters publication, the head of Fnality International, Rhomaios Ram, is awaiting regulatory approval in early 2021. The delay is likely due to the fact that many central banks are now exploring the concept of government cryptocurrencies.
Dutch nonprofit dGen recently announced in a report that three or more nations will replace their fiat currencies with digital ones by 2030. DGen does not make precise assumptions about which countries will make this transition by 2030, but notes significant progress in the development of government cryptocurrencies in the Bahamas and Sweden. As a reminder, China has recently begun testing digital RMB payments for large commercial transactions.