Singapore’s $214 billion state investor Temasek, financial services group DBS and US investment banking firm JP Morgan will jointly establish a new venture named Partior, what the trio described as an open industry platform to “reimagine and accelerate value movements for payments, trade, and foreign exchange settlement”.
Details of how the management of Partior will be split among the investors were not disclosed.
In traditional cross-border payments, there are pain points such as multiple validations of payment details by banks, which translate to costly and onerous post-transaction exception handling and reconciliation activities.
Partior will be created to bring more efficient digital clearing and settlement solutions across the banking industry through the use of blockchain, the parties said in a joint statement. Partior will also develop wholesale payments rails based on digitised commercial bank money to enable atomic, or instantaneous settlement of payments for various types of financial transactions.
Upon completion, 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, delivery versus payment (DVP) and peer-to-peer escrows to complement and value-add to global financial ecosystems.
The platform will start with a focus on facilitating flows primarily between Singapore-based banks in both USD and SGD, before expanding its service offerings to other markets and in other currencies.
“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,” commented Piyush Gupta, CEO of DBS Bank.
Gupta added that the blockchain and smart contracts technology will help banks provide real-time cross-border multi-currency payments, trade finance, foreign exchange and DVP securities settlements.
Partior is built on a previous partnership between Temasek, DBS, and JP Morgan in 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.