DBS, J.P. Morgan and Temasek announced today (April 28) its plans to develop an open industry platform for payments, trade and foreign exchange settlement through a newly-established technology firm.
Called Partior, it aims to disrupt the traditional cross-border payments ‘hub and spoke’ model, which is typically costly and lengthy due to multiple validations on payment details by banks.
Partior aims to address the need for efficient digital clearing and settlement solutions across the banking industry, and targets to address these challenges through the use of blockchain solutions.
The Partior platform is looking to developing wholesale payment rails based on digitised commercial bank money to enable “atomic” or instantaneous settlement of payments for various types of financial transactions. This would help banks overcome challenges presented by the existing method of processing global payments.
The platform will start with a focus on facilitating flows primarily between Singapore-based banks in both USD and SGD, with the intent to expand service offerings to other markets and in various currencies.
Partior’s platform will also be designed to complement ongoing Central Bank Digital Currencies (CBDCs) initiatives and use cases.
Banks Will Be Called On To Join The Platform
The operation of Partior by DBS, J.P. Morgan and Temasek and the completion of development, launch and availability of services on the proposed platform are subject to obtaining any required regulatory consents and approvals.
When complete, the platform aims to provide 24/7 infrastructure that will enable financial institutions and developers to co-create applications that support use cases such as FX Payment Versus Payment (PVP), Delivery Versus Payment (DVP) and Peer-to-Peer escrows to complement and value-add to global financial ecosystems.
“The current hub and spoke arrangement in global payments often results in delays as confirmations from various intermediaries are needed before a settlement is treated as final. This in turn has a knock-on effect and creates inefficiencies in the final settlement of other assets,” said Piyush Gupta, CEO of DBS Bank.
“By harnessing the benefits of blockchain and smart contracts technology, the Partior platform will address current points of friction. The open platform will enable banks around the world to provide real-time cross-border multi-currency payments, trade finance, foreign exchange and DVP securities settlements on a world-class platform, with programmability, immutability, traceability built into its suite of services.”
To encourage broad participation across the banking industry, Partior will be actively engaging leading banks to join the platform to establish the scale required to benefit the industry.
Chia Song Hwee, Deputy CEO, Temasek, revealed that they have received interest from other banks and partners, and look forward to welcoming them onboard as this new platform builds out.
These efforts by DBS, J.P. Morgan and Temasek build on their past work as part of Project Ubin, an industry initiative by the Monetary Authority of Singapore (MAS) to explore the application of blockchain technology involving multi-currency payments and settlements.
“With its genesis from Project Ubin, Partior is a pioneering step towards providing foundational global infrastructure for transacting with digital currencies in a trusted environment, spurring a wide range of use-cases in the blockchain ecosystem,” said Sopnendu Mohanty, Chief FinTech Officer of MAS.
Last December, DBS also planned to set up a digital exchange to help both institutional and accredited investors tap into fully integrated tokenisation and digital asset trading.
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