DBS Group Holdings, JP Morgan and Temasek Holdings have announced their plans to develop an open industry platform that will reimagine and accelerate value movements for payments, trade and foreign exchange settlement in a new digital era, on April 28.
The efforts build on the trio’s 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.
The development of the platform will be done through a newly-established technology company, Partior.
The new company aims to disrupt the traditional cross-border payments ‘hub and spoke’ model, which has resulted in common pain points.
These include multiple validations on payment details by banks, which mean costly and onerous post transaction exception handling and reconciliation.
Partior will target to address the challenges of more efficient digital clearing and settlement solutions through the use of blockchain to enable next generation, programmable value transfer for participating banks and their clients in real-time across a common and open platform.
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Partior is also looking at developing wholesale payment rails based on digitized commercial bank money to enable instant settlement of payments across various types of financial transactions.
When completed, Partior aims to provide round-the-clock 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 add value to global financial ecosystems.
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.
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Piyush Gupta, Chief Executive Officer, DBS Bank, says: “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.”
“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,” he adds.
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Takis Georgakopoulos, Global Head of Wholesale Payments, JP Morgan, says he believes a “shared ledger infrastructure such as the Partior platform will change the way payments are cleared and settled, through this first-of-its-kind, wholesale payments rail based on digitised commercial bank money.”
“After five years of being a partner in Project Ubin, we are thrilled by the launch of Partior as it marks yet another milestone for JP Morgan and the industry – blockchain-based wholesale payments infrastructure where information and value can change hands around the world in a 24/7, frictionless way.”
“We are pleased to work alongside DBS and JP Morgan to create a global platform that will have tangible impact on global payments. Partnerships such as this are important in galvanising fundamental changes. Finding the right approach to payments transformation using new technologies should be a priority as we take our existing infrastructure into the next stage of digitalisation and connectivity,” says Chia Song Hwee, Deputy CEO at Temasek Holdings.
“We’re also heartened by the interest from other banks and partners, and look forward to welcoming them on board as this new platform builds out,” he adds.
Sopnendu Mohanty, MAS’s Chief FinTech Officer says, “The launch of Partior is a global watershed moment for digital currencies, marking a move from pilots and experimentations towards commercialisation and live adoption. With its genesis from Project Ubin, a public-private partnership on blockchain and CBDC experimentation, 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.”
As at 12.45pm, shares in DBS are trading 2 cents lower or 0.07% down at $29.28.
