Goldman Sachs, UBS and Banco Santander support DLT proof of concept initiated by Fnality and HQLAx

Proof of concept showcases how platforms running on different DLTs can be linked, alongside paving the way for the settlement of intraday transactions.

Goldman Sachs, UBS and Banco Santander have supported the first proof of concept (PoC) delivery versus payment (DvP) repo settlement across the Fnality Payment System (FnPS) and HQLAX’s Digital Collateral Registry.

The move bridges together the distributed ledger technologies (DLT) of Enterprise Ethereum and R3 Corda, respectively.

The proof of concept was achieved by connecting HQLAX with the Ecosystem TestNet environment (simulating the Fnality Payment System, built collaboratively with Adhara).

The transactions were settled atomically across both platforms, ensuring each system’s boundaries were respected, with the swap only completed when both systems had confirmed that all criteria had been fulfilled.

This included making sure no collateral was represented on the FnPS and that no cash was represented on HQLAX’s Digital Collateral Registry.

“Efficient cross-chain settlement is going to be fundamental to the scalable development of TradFi on DLT whilst enabling firms to realise the full potential of this innovative technology – it’s exciting to see the successful outcome of the work between HQLAX and Fnality and we look forward to developing this use-case further,” said Amar Amlani, head of EMEA digital assets at Goldman Sachs.  

The transaction showcases how platforms running on different DLTs can be linked to provide increased resilience, and a reduction in risks and fragmented liquidity.

In addition, the successful test will allow Fnality, HQLAX and their mutual clients to focus on the use case implementation, allowing for intraday settlement to become more of a reality.

“This DvP PoC is a significant step for Fnality as we enable a single pool of liquidity for our participants. Coupled with PvP, participants can swap their funds from their home currency to execute a DvP settlement with other platforms and business applications,” said Rhomaios Ram, chief executive of Fnality International.

“Leveraging the strengths of each platform and ensuring they operate seamlessly is what has been exciting to see. This combination can deliver exactly the type of operational efficiencies that have been promised by DLT. Importantly, HQLAX, Fnality and its participants are at the forefront of this innovation, applying DLT to transform traditional financial systems.”

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