Michelle Neal: building institutional digital cash for the 24/7 tokenised economy

Michelle Neal speaks to The Paypers about building institutional-grade digital cash for 24/7, near-real-time settlement of tokenised assets and financial transactions using Distributed Ledger Technology (DLT). 

As part of our 2026 editorial journey to bridge the knowledge gap between traditional finance and Web 3 payments, we explore how established financial leaders are shaping the next generation of financial infrastructure. 

The Paypers continues its exploration of the convergence between traditional finance and decentralised technologies with a new editorial series called Bridging Finance: Institutional Voices on Web 3 Payments, focusing on institutional transformation. Through a collection of in-depth articles and interviews, we spotlight senior financial experts and banking leaders who have not only witnessed the evolution of the traditional financial system but have also anticipated the innovation behind Web 3 payment rails, tokenisation, and programmable money. 

This series examines how distributed ledger technology is redefining settlement, liquidity management, and cross-border payments — making them faster, more cost-efficient, more transparent, and increasingly optimised for AI-driven systems and modern business needs. 

We begin with Michelle Neal, CEO of Fnality International, who shares her journey into the Web 3 and tokenisation space. She discusses what ‘institutional-grade digital cash’ truly means, how prepared the financial industry is for this next wave of infrastructure change, the benefits these innovations bring to market participants, and the risks and realities we must carefully navigate as financial services enter a 24/7 programmable economy. 

Michelle, it’s such a pleasure to have you with us. You’ve built your career in traditional financial markets, and today you’re leading one of the most ambitious digital asset infrastructures. Could you tell us a bit about your journey and what led you from traditional finance into tokenised markets? 

Thank you so much for considering me for the series you are developing. Before joining Fnality, I spent about 25 years in traditional financial markets — first leading Markets businesses at institutions such as Deutsche Bank and BNY Mellon. My original DNA, if you will, has always been rooted in businesses adapting or commercialising around evolving market structure, and as my career has developed on a leadership track, I’ve retained a close strategic interest in market structure orientated businesses. In 2022, I joined the NYFRB to run The Markets Group, where I oversaw open market operations and other critical central bank services such as Treasury auctions, overseas dollar funding activity, and discount window operations. Those experiences gave me two distinct vantage points: firstly, how institutions manage balance sheets and compete in evolving markets, and secondly, implementing policy to safeguard financial stability at the system level among other things. After leaving the Fed, I wanted to stay at the intersection of market infrastructure and financial stability. It became clear to me that while trading and asset markets have digitised rapidly, the way wholesale money moves between institutions has not kept pace. Fnality is about modernising that final layer of settlement — in a way that institutions and regulators can trust. 

Was there a specific ‘aha’ moment that made you realise this wasn’t just experimentation, but a structural shift? 

Fnality began as an exploration into how blockchain technology could improve the plumbing of financial markets, in particular, settlement. But it quickly became clear that the real opportunity wasn’t the technology itself — it was addressing long-standing structural inefficiencies in how banks move money. 

Today, banks pre-fund multiple bilateral exposures across markets and time zones. If they can instead settle through a shared pool of central bank liquidity, balance sheets become more dynamic and their capital significantly more productive. 

The core premise behind Fnality hasn’t changed — but the ecosystem around it continues to evolve, and the need for high-quality wholesale settlement infrastructure has never been clearer. 

Fnality is often described as the first DLT-based wholesale payment system settling in tokenised central bank funds, which sounds both exciting and complex. In practical terms, what is Fnality building, and why does it matter for financial institutions? What problem does it solve that existing market infrastructure does not? 

Fnality provides a regulated, DLT-based wholesale payment system that enables financial institutions to settle transactions in a digital representation of central bank funds. In practical terms, we are building a settlement rail designed for digital assets — but anchored in central bank money. 

As tokenised assets and new forms of digital money develop, they require a common settlement layer that can interoperate across platforms and jurisdictions. Without a trusted way to mitigate exposures between institutions — ideally settling in central bank money within the existing regulatory perimeter — activity will remain constrained. In other words, without a trusted settlement layer, tokenised assets cannot scale. 

Our infrastructure is already live in the UK for sterling transactions, regulated by the Bank of England, and we are pursuing additional currency launches this year. 

There’s a growing view that the real bridge between traditional finance and decentralised finance lies in financial markets - that tokenisation begins with wholesale markets, not retail crypto. We’ve seen signals from traditional institutions, from initiatives around tokenised bonds to asset managers like BlackRock moving value on-chain. Are these credible proof points for traditional bankers? Do they show that tokenisation is relevant to mainstream finance? 

Many bankers and regulators increasingly view tokenisation as the next step in market infrastructure rather than a crypto experiment. It has the potential to modernise treasury management, improve collateral mobility, and optimise intraday liquidity. 

Markets will only scale sustainably once institutions can flatten their exposures — particularly to other commercial banks. Existing central bank settlement rails, such as RTGS, mitigate risk, but they remain constrained by operating hours and limited functionality. Tokenised markets introduce the possibility of synchronised, programmable settlement across platforms. 

Beyond the narrative, what does tokenisation genuinely improve? Is it about faster settlement? Reduced complexity? Improved liquidity management? Lower counterparty risk? And equally important — what use cases are overhyped today? 

Tokenisation has the potential to enable 24/7 financial markets, but the more immediate benefit lies in improving how institutions manage liquidity, collateral, and counterparty risk — ultimately supporting stronger returns on equity. 

Through atomic settlement of assets and cash settlement on chain, institutions can reduce intraday funding needs, free up trapped liquidity, and lower operational complexity across treasury and collateral workflows. 

However, programmability without robust final settlement simply automates existing risk. Some retail-focused tokenisation narratives are likely ahead of institutional plumbing realities, in the near term. 

If you were speaking to a traditional banker who remains sceptical, what would their strongest argument be against tokenisation? And how would you respond? How difficult is it for institutions to adopt tokenised assets? What are the biggest barriers - legal certainty, infrastructure, liquidity, regulation, mindset? 

The biggest hurdle is operational readiness. The technology largely exists, but many banking processes — across finance, risk, balance sheet management, and risk — are still designed for batch processing. 

Achieving near-real-time settlement requires redesigning workflows, not just new rails. These initiatives need to move from innovation labs into core business lines, where markets, treasury, and risk functions have clear ownership and accountability. 

Institutions don’t need perfection from day one — but they do need measurable progress and transparent reporting that demonstrates the capital and liquidity benefits of change. 

For institutions that want to engage without taking excessive risk, what are realistic first steps? Should they start with tokenised bonds, wholesale stablecoins, central bank-backed settlement systems like Fnality, or internal pilots? What does a pragmatic transition look like? 

For most institutions, the pragmatic starting point is not launching new tokenised liabilities — it is upgrading how they settle them. That shift can actually lower risk. 

Internal pilots and tokenised bonds are useful learning exercises, but they do not address the hard part, which is how trades ultimately reach settlement finality. As more activity moves on-chain, banks will become increasingly sensitive to unsecured exposures created through commercial bank money in tokenised form. 

A lower-risk pathway is to ensure tokenised assets connect to regulated, final settlement from the outset. That allows institutions to experiment incrementally — in issuance, repo or collateral mobility — without fundamentally altering their credit risk profile. 

Let’s fast-forward to 2030. If tokenised central bank settlement becomes embedded in wholesale markets, what lessons would you say we learned along the way? What worked better than expected? And what turned out to be harder than anticipated? 

By 2030, we envision a market where Fnality becomes the ubiquitous settlement asset for tokenised central bank money.  

By 2030, I would also expect to see far fewer pilot programs and far more production-grade wholesale use cases across markets. 

One key lesson may be that tokenising assets was often the more straightforward part of the journey. Building scalable, trusted settlement infrastructure across counterparties, jurisdictions, and platforms — without introducing new liquidity or operational risks — proved more complex. 

Market structure change tends to take longer than technology change. 

For financial leaders reading this who don’t want to miss the opportunity — what questions should they start asking today? And what actions should they begin taking now to stay relevant in a tokenised market structure? 

Leaders should be asking themselves: if our assets move on chain, what do they settle in? Tokenising issuance or collateral without addressing settlement risk simply shifts — rather than reduces — balance sheet exposure. Institutions should begin mapping where tokenisation could reduce liquidity usage or unlock collateral mobility, and ensure those use cases from intraday repo, FX, and margin to cross-border payments and exchanging programmable bank money can connect to regulated, final settlement in central bank money, which is the core mission of Fnality. The priority today isn’t scaling issuance — it’s ensuring the settlement layer is in place to support it safely as the focus increasingly moves from pilot to production. 

About the author 

Michelle Neal is CEO of Fnality, the first fully regulated DLT-based wholesale payment system that settles central bank funds on-chain. Previously, Michelle served as Head of Markets at the Federal Reserve Bank of New York and led global Markets at BNY Mellon. She has also held senior roles at Royal Bank of Scotland, Nomura, and Deutsche Bank, leading markets businesses, while always maintaining a keen focus on modernizing and strengthening financial market infrastructure.  

About Fnality 

Fnality operates a regulated, DLT-based wholesale payment system that enables institutional-grade adoption of digital assets by allowing financial institutions to settle payment obligations on chain in central bank reserves. By eliminating commercial bank credit risk, we create the neutral settlement layer essential for the safe scaling of digital-asset markets. Our systemically important payment system is live in the U.K., regulated by the Bank of England, and additional currency systems are in development.