JP Morgan partners DBS & Temasek for DLT payments platform

JP Morgan is partnering with Asia’s DBS bank and Temasek to establish a Distributed Ledger Technology (DLT) open industry platform for multi-currency cross-border payments, trade transactions and foreign exchange settlements.

Partior, a joint venture company which will run the technology platform, is being set up in association with the Monetary Authority of Singapore.

The group is aimed at disrupting the traditional cross-border payments ‘hub and spoke’ model with the use of blockchain and smart contract solutions to enable value transfer for participating banks in real-time.

The open platform is encouraging broad participation by banks globally as part of acknowledgement that “the future of global payments is on the cusp of a fundamental shift” to digital payments infrastructure and clearing solutions.

In a statement the group said that Partior is aimed at solving common pain points in traditional cross-border payments including multiple validations on payment details by banks, which can translate to costly post transaction exception handling and reconciliation activities.

Such functionality would help banks overcome challenges presented by the current standard sequential method of processing global payments, Partior said.

The Partior platform has also set its sights on developing wholesale payments rails based on digitised commercial bank money to enable “atomic” or instantaneous settlement of payments for various types of financial transactions.

In July last year the Monetary Authority of Singapore completed the final testing phase of Project Ubin, which was piloting digital currency transactions on blockchain, with more than 40 financial and non-financial firms.

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.

When complete, 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 (PVP), Delivery Versus Payment (DVP) and Peer-to-Peer escrows to complement and value-add to global financial ecosystems.

Sopnendu Mohanty, chief FinTech officer at Monetary Authority of Singapore, said: “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.”

Takis Georgakopoulos, global head of wholesale payments at JP Morgan, said: “Our newly formed business unit, Onyx by J.P. Morgan, is focused on providing clients with the best-in-class platforms as their business models and banking needs evolve over time. 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, wholesale payments rail based on digitised commercial bank money.”

He added: "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 J.P. 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. J.P. Morgan is committed to being a leader in this space as our clients transition towards multiple bank platforms, de-centralised networks and programmable money.”

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