Wall Street banking giant JPMorgan is looking to overhaul the blockchain-based foreign exchange and trade settlement for cross-border payments. In collaboration with Singapores Temasek Holdings and DBS Group, JPMorgan has announced the launch of a new company Partior while leveraging blockchain technology and digitizing the M1 commercial bank money.
In a statement on Wednesday, April 28, JPMorgan said that the new company aims at reducing friction and latency “for cross-border payments, trade and currency settlements,” reported Bloomberg. Partior will develop wholesale payment rails using digitized commercial bank money. Besides, it will also enable “atomic” or instantaneous payment settlements for different kinds of financial transactions.
This will drastically improve the transaction bandwidth and will help overcome the challenges with the existing standard sequential method of processing global payments. Partiors multi-currency clearing and settlement solution will facilitate 24/7 instant settlement. Sopnendu Mohanty, chief fintech officer at the Monetary Authority of Singapore, said:
“The launch of Partior is a global watershed moment for digital currencies, marking a move from pilots and experimentations toward commercialization and live adoption”.
Starting the Pilot Tests From Singapore
The Partior blockchain platform from JPMorgan will initially focus on testing payments among Singapore-based banks. The bank will initially facilitate only two currencies – USD and SGD. Later, it will plan to extend its service offerings to other markets as well!
Besides, the platform will also work on complementing the ongoing CBDC initiatives from the Singapore Central Bank. Speaking on the development, Piyush Gupta, CEO of DBS said:
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.
“By harnessing the benefits of blockchain and smart contracts technology, the Partior platform will address current points of friction. The open platform will enable banks around the world to provide real-time cross-border multi-currency payments, trade finance, foreign exchange and DVP securities settlements on a world-class platform, with programmability, immutability, traceability built into its suite of services.”