In collaboration with NatWest and Santander, three UK FinTechs have finished a pilot which involved the issue of tokenised security on a public blockchain, with the payment leg conducted through a Distributed Ledger Technology (DTL)-enabled payments system.

The proof of concept pilot was designed to test the FinTechs’ plans to use DLT-based systems to facilitate intraday liquidity savings, end-to-end repurchase agreements, and interbank intraday FX swaps.

Fnality – which is creating a network of distributed payment systems using blockchain technology – partnered with Nivaura – the FinTech firm developing low-code/no-code transaction management workflow automation technology for primary markets – and Adhara, – software company that provides real time, multi-currency, liquidity management and international payment solutions.

NatWest and Santander acted as the two counterparties for the transaction during the trial.

“NatWest is delighted to have acted as issuer and dealer in this landmark pilot transaction,” said Christopher Agathangelou, head of digital capital markets & flow credit at NatWest. “Financial markets are increasingly embracing distributed ledger technology and NatWest will always advocate for innovation and market standardisation in line with our values and the interests of our customers.

“Distributed ledgers and digital assets will help level the playing field by lowering the barriers to entry to financial markets for both large frequent issuers and smaller enterprises.”

John Whelan, managing director of digital assets at Santander, said: “The benefits of programmable digital securities can be maximised by incorporating programmable digital cash for settlement and the entire post-trade lifecycle leading to many efficiency gains and bring enormous amounts of innovation to the capital markets.”

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