JP Morgan, DBS and Temasek form new tech company to use blockchain for faster cross-border payments
JP Morgan announced yesterday that it is partnering with leading Singaporean bank DBS and investment firm Temasek to build a platform designed to transform interbank value movement for the digital age.
The platform will be developed for a newly formed technology company, Partior, which will use blockchain solutions to address common frictions in traditional cross-border payments that make the process slow and costly.
Piyush Gupta, CEO of DBS Bank, explained: “Today’s hub-and-spoke arrangement for global payments often creates delays because confirmations are required from multiple intermediaries before a settlement can be considered final. That, in turn, triggers a domino effect and causes inefficiencies in the ultimate settlement of other assets. By leveraging blockchain and smart contract technology, the Partior platform will tackle these current bottlenecks.”
Banks worldwide could use the platform to offer real-time foreign exchange, trade finance and Delivery Versus Payment (DVP) securities settlements, alongside multi-currency cross-border payments. Partior also aims to build an infrastructure to enable instant payments through “atomic” transfers.
JP Morgan and Temasek previously collaborated on the blockchain-based Project Ubin initiative, launched by the Monetary Authority of Singapore in 2017 to explore a digital Singapore dollar.
Takis Georgakopoulos, Global Head of Wholesale Payments at JP Morgan, added: “We believe a shared ledger infrastructure such as the Partior platform will change the way payments are cleared and settled, through this first-of-its-kind digital commercial bank money. After five years as a Project Ubin partner, we are excited to launch Partior, which marks another milestone for JP Morgan and the industry: a blockchain-based wholesale payments infrastructure that allows information and value to change hands seamlessly, around the clock, globally.”
To achieve the level of adoption required to transform the sector, Partior will actively engage and encourage leading banks to join the platform. The platform is also intended to support future initiatives and use cases for central bank digital currencies (CBDCs).
Initially, the platform will focus on transferring value in USD and SGD, primarily between banks based in Singapore. Additional markets and currencies will be added over time.