DLT repo settlement proof of concept heralds possibility of intraday settlement

Initiated by Fnality and HQLAX, project showcases how platforms running on different DLTs can be linked.

By Wesley Bray

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.

It 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.

“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,” said Amar Amlani, head of EMEA digital assets at Goldman Sachs.

“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.”  

The transaction showcases how platforms running on different DLTs can be linked to provide increased resilience, and a reduction in risks and fragmented liquidity. The successful test will allow Fnality, HQLAX and their mutual clients to focus on use case implementation, bringing intraday settlement one step closer.

“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.”