Homegrown blockchain-based technology provider for payments clearing and settlement Partior is set to bring its technology to the global markets.
Since becoming fully operational in October last year, the firm has been building out its services and focusing on scalability, its CEO Jason Thompson tells The Edge Singapore. Within this year, Partior is looking to expand its end-to-end settlement currencies to eight from the current two of the Singapore dollar and US dollar.
“We had been increasing the platform’s capability, volume and velocity since last year. The technology is scaling very quickly for us. But at the same time, the industry has changed and the technology available now compared to when Partior was conceived is very different — so, we are looking at a Version 2 of the platform, thinking about real globalisation of the technology over the next decade.
“We are really re-evangelising the platform, working with global technology partners and establishing industry-specific partnerships, among others. We are learning and thinking about how the platform is going to mature, just like you would expect in any enterprise solution company,” says Thompson.
Partior was founded by DBS Group Holdings, JP Morgan Chase & Co and Temasek, and has its genesis in Project Ubin — a collaboration between the Monetary Authority of Singapore (MAS) and the financial industry which commenced in 2016 to explore the use of blockchain and distributed ledger technology for clearing and settlement services.
The platform began its first pilot with the participating banks late last month, achieving end-to-end settlements in the Singapore dollar and US dollar in fewer than 120 seconds. This is made possible using an “atomic” model, replacing the existing sequential operational approach to payments settlement. The reduction in settlement time is able to free up liquidity and reduce settlement risk.
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The six new currencies that Partior is looking to expand to are pound sterling, euro, Australian dollar, yen, renminbi and Hong Kong dollar. Thompson says the firm is also looking at adding other currencies, aiming to double the currency count to 16 in 2023.
Solving first-gen problems
The expansion and globalisation of Partior’s services will be supported by its hiring of key individuals, which includes chief operating officer Stella Lim (previously with Swift), head of product Atul Bhuchar (previously with DBS), head of architecture, design and innovation Saxon Bartrop (previously with UOB) and general counsel Angie Ong (previously with Meta).
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The firm has also launched Hyderabad Development Centre, which serves as its Web 3.0 centre of excellence. The technology head of the new centre is Abhinava Kumar Singh, previously with NatWest.
Thomspon says the firm is currently recruiting 140 people across both its research and development centres in Singapore and Hyderabad. It is also establishing regional Customer Success Centres — one in Asia, Europe, the UK and New York in the US, aside from studying the potential of having a small team in China.
In its quest to disrupt the global cross border transactions market which is expected to reach US$156 trillion ($213.8 trillion) this year, Partior is solving “first-generation issues”, says Thompson. While this may cause some difficulties to the company when it comes to explaining what it does and how it works to certain parties, it also presents Partior with opportunities, he adds.
“When you think about technology business, you have to answer three questions — who are you serving? What problem are you solving? And what economics are you disrupting? I find a lot of companies cannot answer these questions very clearly.
“For us, it is very simple. We serve an ecosystem of banks and non-banks within the financial services industry. We provide cost-effect, rapid money movement globally. We disrupt the cost of transacting money and continue to accelerate amid increasing demand pressure for real-time transactions. We are the first and only organisation in the world that is doing this today,” says Thompson.
While he acknowledges that there are a number of organisations that could be Partior’s close competitors, Thompson reiterates that Partior is the only organisation that is already fully operational.
“I’ve slept less and definitely have more grey hair since we went live. But I love what we do and we have learnt so much in the past nine months. What I am trying to do today is keeping our organisation focused on what we have to deliver now — to credentialise Partior; to look at the future and productisation; to study central bank digital currencies (CBDC) innovations and to analyse next generation technology. It is a fast-moving world and it is very challenging, but I am grateful to be involved,” says Thompson.
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The future of liquidity
Commenting on the future of cross-border transactions, Thompson believes that the world’s liquidity is going to be disrupted — today, more than 99% of the world’s liquidity is provided by fiat currency. In the future, however, liquidity will be multifaceted and no longer be confined to M0 and M1, especially with innovations surrounding bank coins and stablecoins. Also known as narrow money, M0 and M1 are monetary aggregates which include coins and notes in circulation.
“Ultimately, where will we get to? Partior is multifaceted in two currency types — fiat and digital currencies. With the capability of payment, asset transfer and delivery versus payment (DVP), we think the network has a lot of opportunities to solve issues today at scale. The platform is very much capable of adapting to the future of technology, money movement and asset transfer.
“In our branding, we talk a lot about value exchanges — one is money while the others could be mortgage, equity or bonds. That’s where we see the technology going and that is the moat we are building,” says Thompson. This is made possible via symbiotic transfer over the distributed ledger technology and the use of smart contracts to set up money or asset transfers. Instead of an atomic transfer of money, it will be an atomic transfer of assets, explains Thompson.
He highlights that the firm was recently involved in Project Dunbar, a study conducted by The Bank for International Settlements (BIS) Innovation Hub and central bank partners in Australia, Malaysia, Singapore and South Africa to facilitate international settlements with multiple CBDS (m-CBDCs). Project Dunbar aims to allow transacting parties to pay each other directly in different currencies without the use of intermediaries like correspondent banks.
In March, BIS Innovation Hub announced the completion of prototypes for a common platform enabling the international settlements using m-CBDCs, proving that financial institutions could use CBDCs issued by participating central banks to transact directly with each other on a shared platform. This could potentially reduce reliance on intermediaries as well as the cost and time taken to process cross-border transactions.
Moving forward, Partior will continue to figure out how to serve digital currencies in the future, be it CBDCs, bank coins or other types of stablecoins, says Thompson. “The past nine months have been a good start and I am proud of my team and what we have achieved,” he adds.
