# Wholesale DLT Settlement: Choosing the Settlement Asset

> Fnality, Partior, deposit tokens and wholesale CBDCs compared on the one axis that matters: whose obligation the ledger entry is, and what that does to credit risk and supervision.

Author: Alena Dunaeva — Lawyer, Family Office (https://wiki.private.law/en/authors/dunaeva)
Last modified: 2026-08-31T19:18:00.000Z
Canonical: https://wiki.private.law/en/wholesale-dlt-settlement
Topics: banking
Jurisdictions: global, uk, singapore
Product tags: banking, stablecoin, custody
Semantic tags: banking, stablecoin, custody

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Wholesale settlement moves money between financial institutions rather than between their customers. Neither a private individual nor a corporate structure connects to these systems: access is confined to admitted banks, and the effect reaches a client only through their own bank — in crediting times, in finality and in availability outside operating hours.

Comparing these platforms on speed or technology is pointless, because the technology is nearly identical. One thing separates them, and the difference is legal — the settlement asset. A ledger entry is always somebody's obligation, and whose it is determines the credit risk, the supervisory regime, the currency coverage and how many years the launch takes.

## Concept: whose obligation sits on the ledger

The technical layer is much the same everywhere: a permissioned ledger, nodes held by the participants themselves, atomic execution by smart contract — both legs of a trade move in one indivisible step or roll back entirely. Atomicity is what closes the risk of partial execution, the principal settlement risk outside CLS. What differs is what these platforms tokenise.

The first family is central bank money. Participants fund a shared account at the central bank, a digital representation of those funds appears on the ledger backed 1:1, and the claim runs against the central bank itself. The second is the obligations of commercial settlement banks: the entry represents a deposit of a specific bank owed to a specific client, and that bank's credit risk does not disappear. The third is a single bank's deposit token, where money never leaves that bank's balance sheet. Above all three sits a fourth layer — wholesale central bank digital currencies, built by regulators rather than by consortia.

The reading rule is simple and unwelcome: the closer the settlement asset sits to a central bank's balance sheet, the less credit risk it carries — and the longer, costlier and more political the launch becomes. Each currency requires a separate decision by its own central bank, and venture capital cannot substitute for it. The legal nature of a dollar-denominated token on the customer side is treated separately, in the material on the [four legal forms of the digital dollar](https://wiki.private.law/en/digital-dollar-forms).

## Central bank money: Fnality

The Sterling Fnality Payment System \(£FnPS\) has operated since December 2023 through an omnibus account at the Bank of England; Lloyds, Santander and UBS made the first live payments. The Bank of England announced its omnibus account policy in April 2021 and Fnality was among the first applicants: participants fund a shared account through RTGS, the operator Fnality UK holds that account, and a digital representation of the funds appears on the ledger backed 1:1. The system is built for round-the-clock operation and supports earmarking — reserving funds against a specific settlement — and DvP.

The legal frame was completed in two steps. In August 2022 HM Treasury recognised £FnPS as a systemically important payment system, placing it under Bank of England oversight, and on 16 December 2024 the system received settlement finality designation: a completed settlement is protected from challenge even if a participant goes insolvent. As of August 2026 it remains the only UK DLT system holding that status.

The price of that cleanliness is time and shareholder composition. Eight years and three rounds separate the Utility Settlement Coin research project of 2015 from live payments: a £50mn Series A from 14 banks in June 2019, a £77.7mn Series B in November 2023 and a $136mn Series C on 23 September 2025 — roughly $295mn in total. The Fnality history does not establish a minimum capital or shareholder formula for any other applicant.

The live use cases are those where intraday liquidity and synchronisation matter. In May 2025 Fnality joined the OSTTRA and Baton Systems FX PvP network as its first digital settlement leg. Intraday repo is moving with HQLAx: a December 2022 pilot with Santander, Goldman Sachs and UBS demonstrated cross-chain DvP between Corda and enterprise Ethereum, end-to-end testing was completed in June 2024 and an application filed with the Bank of England; there is no public confirmation of a production launch as of August 2026. Onboarding is real: BNP Paribas joined £FnPS in July 2025 and immediately made an on-chain payment on an interest rate swap with Lloyds.

The dollar and euro systems remain applications. In the United States Fnality is pursuing an innovation bank charter in Connecticut — public hearings took place in March 2025 — and awaits the Fed's decision on a joint account, the analogue of the London omnibus account. The policy context has moved: on 20 May 2026 the Fed issued an NPRM on payment accounts, "narrow" non-interest-bearing accounts with individual caps of up to $1bn and access to Fedwire, FedNow and the National Settlement Service, and a day earlier an executive order on fintech access to the regulator's payment infrastructure, with comments accepted until 27 July 2026. Fnality's application runs on a different track and is not resolved by that proposal.

## Commercial bank obligations: Partior

Partior grew out of Project Ubin, the Monetary Authority of Singapore's five-phase DLT settlement experiment of 2016–2020; the final report of July 2020 stated that the model was commercially viable. In April 2021 DBS, J.P. Morgan and Temasek spun the work out into a separate company, and by October 2021 the network had run its first live USD and SGD settlements between the founders, end-to-end in under 120 seconds. Standard Chartered came in as a strategic investor in 2022, and general availability with USD, EUR and SGD flows began in 2023.

The settlement asset here is a tokenised deposit — the obligation of a specific participating bank. The entry economics follow: disclosed venture capital amounts to an $80mn Series B — over $60mn in July 2024 led by Peak XV Partners with Valor Capital and Jump Trading, plus roughly $20mn from Deutsche Bank as a strategic investor in November 2024. That is an order of magnitude lighter than models settling in central bank money, and the price of that lightness is participant credit risk built into the design.

The corridor map grows in a series of firsts. Standard Chartered ran the network's first EUR transactions on 15 May 2024 on the Hong Kong–Singapore corridor with the corporate clients Siemens AG and iFAST. Deutsche Bank ran its own first EUR transaction on 25 September 2025 paired with DBS, joining as a euro settlement bank. Emirates NBD moved USD blockchain payments into production on 14 July 2026 — the first bank in the MENAT region; at launch the service covers corporate client transfers to beneficiary accounts at J.P. Morgan. Nium became the first non-bank participant in November 2024, a bridge into the OSTTRA and Baton Systems FX PvP network has run since June 2025, and on 30 July 2026 Partior and OpenAssets completed a proof of concept for atomic DvP in which the settlement asset was a tokenised deposit.

Supervision is the model's soft spot. Partior operates as an FMI in commercial bank money without a banking licence of its own: compliance, sanctions screening and client admission all sit with the participating banks. The network does not appear on the MAS list of designated payment systems as of August 2026, so oversight runs indirectly, through the prudential regimes of those banks. The wider map of what activity needs a licence, and which one, is in the [fintech hub](https://wiki.private.law/en/fintech-hub).

## A single bank's deposit token

The third model is the simplest of the three: the ledger belongs to one bank, and money never leaves its balance sheet. Kinexys by J.P. Morgan — called Onyx until November 2024 — works this way: the JPMD deposit token is available to institutional clients, the platform has processed over $3trn at an average of more than $5bn a day, and from 7 January 2026 it is being rolled out in phases onto the Canton Network. Settlement nonetheless remains a claim on J.P. Morgan.

The limitation is enclosure. The token circulates inside one bank's client perimeter, and interbank compatibility requires a separate arrangement: in November 2025 Kinexys and DBS announced a framework project on tokenised-deposit interoperability, a sign that the market is still choosing a standard. A deposit token is neither a stablecoin nor a central bank digital currency: the typology of private tokens redeemable at par is set out in the [stablecoins](https://wiki.private.law/en/stablecoins) overview.

## Wholesale CBDCs: mBridge, Helvetia, e-HKD

The fourth layer is built by regulators themselves, and its logic differs: the settlement asset is a digital obligation of a central bank, and the platform's participants are central banks rather than a consortium of private shareholders.

mBridge is the only one of these platforms with material cross-border volume: around $55bn of transactions processed by November 2025. The participants are mainland China, Hong Kong, Thailand, the UAE and Saudi Arabia; the Bank for International Settlements exited the project in 2024, and the platform runs under the participating central banks led by the PRC. Russia is not among them, so for Russian flows the platform remains a marker for the future while renminbi payments run through the classic CIPS corridor — the mechanics are covered in the material on [payments and trade with China](https://wiki.private.law/en/china-payments).

The European and Asian contours stay experimental. The Swiss Helvetia pilot, settling tokenised securities in central bank money, has been extended at least to mid-2027, with the Swiss National Bank stating expressly that this promises no permanent wholesale CBDC. Hong Kong shifted its aim: on 28 October 2025 the HKMA completed the second phase of the e-HKD pilot, concluding that tokenised deposits deliver the same retail result, and moved the digital Hong Kong dollar into the wholesale contour, towards large settlements and support for tokenisation. The full map of retail and wholesale central bank projects is in the [CBDCs in 2026](https://wiki.private.law/en/cbdc-landscape) overview.

## Five rails on one axis

The comparison is worth making precisely because the technology converges while the legal nature of the settlement asset does not; that nature decides what happens to a completed settlement when a participant fails.

| **Model** | **Settlement asset** | **Whose obligation** | **Credit risk in the asset** | **Supervisory status** | **Position at August 2026** |
| --- | --- | --- | --- | --- | --- |
| Fnality, £FnPS | Digital representation of funds in a Bank of England omnibus account, backed 1:1 | Bank of England | Absent by construction | Recognised systemically important payment system \(HM Treasury, August 2022\), settlement finality designation since 16.12.2024 | Sterling live since December 2023; dollar and euro are applications, the dollar turning on the Fed |
| Partior | Tokenised deposits of the settlement banks | A specific participating bank | Credit risk of the bank that issued the obligation | Private FMI without a banking licence; absent from the MAS designated payment systems list | USD, EUR, SGD; DBS, J.P. Morgan, Standard Chartered, Deutsche Bank, Emirates NBD |
| Single-bank deposit token \(Kinexys\) | Tokenised deposit inside one balance sheet | The issuing bank | Credit risk of that bank | The bank's own prudential regime; the platform holds no separate status | Institutional clients of J.P. Morgan; interbank compatibility is a framework project with DBS \(November 2025\) |
| mBridge | Digital obligations of the participating central banks | The platform's central banks | Absent by construction | Governed by a consortium of central banks; the BIS exited in 2024 | Mainland China, Hong Kong, Thailand, UAE, Saudi Arabia; ≈$55bn processed by November 2025 |
| Helvetia \(SNB pilot\) | Central bank money settling tokenised securities | Swiss National Bank | Absent by construction | Pilot regime; promises no permanent wholesale CBDC | Extended at least to mid-2027 |

One conclusion follows from the table: choosing a rail is choosing a settlement counterparty, not a technology vendor. As of August 2026 live wholesale settlement in central bank money exists in exactly one currency and one jurisdiction; everything else either carries commercial bank credit risk or remains a pilot.

## What it changes for a bank's client

No private or corporate client connects directly to any of these systems. The influence is indirect: where the bank holding a structure's accounts is connected to such rails, individual transactions can change in timing, availability window and finality.

When reviewing a banking shelf, specific questions work: which wholesale systems the bank uses, which currencies and transaction types are live on them, and whether cut-off, finality or pricing change as a result. Membership of a consortium is not by itself a measure of a bank's credit quality or treasury competence — it is a fact about infrastructure, not an assessment of the counterparty.

Rail and product are worth keeping apart. A payment over a rail settling in central bank money closes settlement risk between banks; it changes neither the protection of the client's balance nor the sanctions filter, because screening is performed by the participating banks and every payment passes their usual procedures.

> ⚠️ **Where this breaks.** Announced and live are different states: Fnality's dollar and euro systems depend on separate regulatory decisions, and the Fed's payment-account NPRM of 20.05.2026 does not resolve the application.
> Settlement in commercial bank obligations is exactly as sound as the bank issuing the entry, and Partior's currency coverage rests on a handful of settlement banks — the departure of any one narrows the corridor map.
> The supervisory framework for private interbank DLT networks continues to form jurisdiction by jurisdiction, and absence from a designated payment systems list means indirect oversight, not the absence of it.
> Concentrating wholesale settlement on one platform creates a systemically important point of failure — which the recognised-payment-system status itself acknowledges.
> None of these consortia publishes tariffs, so an external comparison on price per transaction is not meaningful.

## Q/A

### Can anyone connect to these systems directly?

No. Access is confined to admitted financial institutions: at Fnality, to institutions entitled to settle in central bank money through the omnibus account; at Partior, to participating banks and selected fintech partners such as Nium. A corporate client uses the network automatically when its bank routes a payment through it; there is no separate onboarding for companies.

### What does settlement in central bank money change in practice?

The nature of the claim and the legal protection of a completed settlement. Funds behind Fnality's sterling settlement asset are held through the Bank of England omnibus-account structure rather than as a claim on a commercial settlement bank, and settlement finality designation protects a completed transfer under the applicable UK regime. Operational, participant, liquidity and system risk all remain.

### What is atomic settlement and why does it matter here?

Both legs of a trade execute simultaneously and indivisibly: either the currencies, or the asset and the money, move together, or the whole operation rolls back. For multi-currency payments and FX PvP that closes the risk of partial execution — the main settlement risk outside CLS — and for repo and DvP it synchronises the movement of the security and the cash.

### Are a deposit token, a stablecoin and a wholesale CBDC the same thing?

No; the issuer and the holder's protection differ. A deposit token remains a bank deposit with everything the banking regime brings; a stablecoin is a claim on a licensed issuer backed by its reserves; a wholesale CBDC is a direct obligation of a central bank available only to financial institutions. The customer side of that distinction is set out in the material on the [legal forms of the digital dollar](https://wiki.private.law/en/digital-dollar-forms).

### What does participation cost, and can the platforms be compared on price?

Neither Fnality nor Partior publishes tariffs as of August 2026: both are closed networks where terms are set contractually inside the consortium and users and shareholders largely overlap. The economics for a bank come from released intraday liquidity, smaller buffers against settlement risk and a round-the-clock window; for a client the price is set by their own bank's tariffs.

> 🍓 One axis governs the choice: whose obligation sits on the ledger. Fnality settles in claims on the Bank of England through an omnibus account and holds recognised-payment-system status with settlement finality designation from 16.12.2024 — the only UK DLT system with it; the price was eight years, roughly $295mn and a dollar contour that turns on a Federal Reserve decision. Partior settles in tokenised deposits of participating banks: an order of magnitude cheaper \(an $80mn Series B\), faster to launch, with the issuer's credit risk inside and no licence of its own. A single bank's deposit token removes the interbank question at the cost of enclosure, while wholesale CBDCs — mBridge, Helvetia, e-HKD — stay either regional or experimental. The practical rule for a client is to ask their own bank not about the technology but about the currency, the transaction type and the finality of the specific route.

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## Factual claims

- The Sterling Fnality Payment System (£FnPS) has operated since December 2023 through an omnibus account at the Bank of England; Lloyds, Santander and UBS made the first live payments.
- Partior grew out of Project Ubin, the Monetary Authority of Singapore's five-phase DLT settlement experiment of 2016–2020; the final report of July 2020 stated that the model was commercially viable.
- mBridge is the only one of these platforms with material cross-border volume: around $55bn of transactions processed by November 2025.

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