Backed by some of the world's biggest banks, Fnality is building a Utility Settlement Coin (USC) based on Ethereum.

It is now working to create interoperability between the USC and Finteum's application, which is using the R3 Corda platform to create a global financial market for intraday liquidity.

The partners argue that while FX is the world’s largest and most liquid market, it is traded over disparate and often outdated systems and technology, leading to duplicative processes and high pre and post trade processing times.

By combining their projects, they hope to bring instant settlement to the market. Using Finteum, USC funds are reserved before an order is placed in the Central Limit Order Book, and the order can be subsequently cancelled, freeing up the coin.

Banks would use the USC to transfer legal ownership of the two currencies using money held at central banks. This would happen atomically, with either both transfers occurring together, or none at all.

Because this version of settlement can occur 24/7, there is less counterparty risk and fewer intermediaries.

Brian Nolan, co-founder, Finteum, says the firms now want to get three or four banks on board to support integration and give feedback during testing.

Says Nolan: "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."