JP Morgan, DBS and Temasek have founded a new technology company that aims to make cross-border payments more efficient with the help of blockchain
JP Morgan yesterday announced a collaboration with leading bank DBS and investment firm Temasek aimed at developing a platform to adapt value trading between banks to the new digital age.
The platform is being developed by the newly founded technology company Partior, which uses blockchain solutions to tackle common problems in traditional cross-border payments that make the process slow and costly.
Piyush Gupta, Managing Director of DBS Bank, explained: “The current hub-spoke system in global payment transactions often leads to delays, as intermediaries need to confirm payment transactions before a transaction is treated as final. This, in turn, affects the other assets and leads to inefficiencies in the final settlement of other assets. The Partior platform aims to address these current issues by taking advantage of blockchain and smart contracts technology.“
In addition to cross-border payments in multiple currencies, banks around the world can use the platform to conduct real-time foreign exchange transactions, trade financing, and ticket-to-ride transactions with securities. Partior also wants to develop an infrastructure for immediate payment processing through “atomic” transfers.
JP Morgan and Temasek have already collaborated on the blockchain-based payments initiative Project Ubin, which was launched in 2017 by the Monetary Authority of Singapore (MAS) to develop a digital Singapore dollar.
Takis Georgakopoulos, global head of wholesale payments at JP Morgan added : “We are convinced that a shared ledger infrastructure such as the Partior platform will transform payment processing with the first wholesale payment channel based on digitized commercial bank money. After five years as a partner in Project Ubin, we are excited about the launch of Partior, as it represents another milestone for J. P. Morgan and the industry – a blockchain-based infrastructure for wholesale payments, where information and assets change hands around the globe, around the clock and smoothly.“
In order to achieve the necessary acceptance for the transformation of the industry, Partior will encourage leading banks to join the platform through active engagement. The platform is also intended to support future initiatives and use cases of digital central bank money (CBDCs).
Initially, the platform focuses on value transfer in USD and SGD between Singapore-based banks. But more markets and currencies will be added.