Mizuho Bank has joined the growing list of custodians throwing its weight behind the Utility Settlement Coin (USC) project, bringing the total number of shareholders to 15.
The Japanese bank has become a shareholder of Fnality International, the company building the means of payment, joining the likes of MUFG, State Street and BNY Mellon.
The initiative, designed to facilitate payment and settlement for institutional markets using blockchain technology, is aiming to transform current post-trade processes.
USC plans to enable Delivery vs. Payment (DvP) in tokenised securities markets, and in the secured funding market, allow instant settlement on a Payment vs. Payment (PvP) basis.
Almost four years after plans for the project first emerged, Fnality and its 14 shareholders announced in June, their intentions to move forward with the project following a series A equity round of £50 million.
Since the close of the funding, Fnality said it has been working to build out corporate capabilities; including adding to the management team, engaging with the various central banks in order to establish local entities and with shareholders to ensure they will be ready to use the platform.
“We are delighted to join this strong group of founding shareholders. Mizuho is fully committed to being a driving force in change in financial services,” Fumio Tajima, executive officer at Mizuho Bank. “We see that Distributed Ledger Technology (DLT) offers huge potential and the use of USC as a settlement asset will be pivotal in enabling this change.”
In Global Custodian’s upcoming Fall Edition, we are taking a deep look inside the USC project, speaking to the banks supporting it and the executive team at Fnality, along with other market commentators.
“USC will put fiat currency on a blockchain in a way that is unique and frankly better than any other initiative that I have seen in this space,” Tom Casteleyn, global head of custody at BNY Mellon Asset Servicing, told Global Custodian.
Fnality has said that USC envisages being 100% backed by fiat currency held at the respective central bank with convertibility into fiat currency at par guaranteed at all times.
The team at Fnality has made sure to engage with central banks and regulators early and loop them in on the process, avoiding the pitfalls others fallen into when launching tokenised projects.