Institutional crypto weekly roundup

Fnality builds on utility settlement coin for FX trading without settlement risk

Fnality and blockchain platform Finteum announced they are working together to deliver interoperability between the Finteum application, built on R3’s Corda platform, and Fnality’s Utility Settlement Coin (USC) solution, which is based on Ethereum. The interoperability focuses on intraday foreign exchange (FX) swaps between large institutions and will enable FX trading without settlement risk.

Brian Nolan, co-founder of Finteum, said in a statement: “Any attempt for a bank treasurer to execute an intraday FX swap involves settlement risk and timing uncertainty in the current market. Intraday FX swaps are therefore an untapped source of value for bank treasurers. Large banks could each save tens of millions by creating efficiencies in their intraday liquidity. Instant gross settlement doesn’t work for every use case, but is important for the initial payments in intraday FX. Using R3’s Corda platform, we are able to work with organizations at the forefront of industry change – such as Fnality – to deliver crucial responses to market needs. We want to work with three or four banks to support integration and provide feedback while we test and improve the solution and bring it closer to production.”

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Investment Executive: crypto faces tough road to regulatory approval

Central bankers have signaled that cryptocurrencies will face a high hurdle to win official sanction from government policymakers. Senior government policymakers from around the world met today in Basel, Switzerland, to discuss the policy and regulatory issues arising from the development of so-called stablecoins, such as Facebook’s Libra, which are cryptocurrencies pegged to the value of a more stable underlying asset.

The meeting was hosted by the Bank for International Settlements (BIS), and convened by a G7 working group that is examining emerging stablecoins, with a report on the phenomenon slated for mid-October: Benoît Cœuré, chair of the working group, who also chairs the Committee on Payments and Market Infrastructures, was cited in an Investment Executive article stating: “They [Stablecoins] give rise to a number of serious risks related to public policy priorities. The bar for regulatory approval will be high,” added Cœuré.

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