The group, which will be called Partior, will use blockchain technology to digitize commercial bank money in order to reduce existing frictions and time delays in cross-border transfers, commerce, and currency settlements, according to a statement released on Wednesday, April 28.
Partior, which means “to distribute and share” in Latin, is also expected to develop wholesale payment rails based on digitized commercial bank money to enable “atomic” – or instantaneous – settlement of payments for various types of financial transactions according to the statement. This will assist banks in overcoming the difficulties posed by the new conventional sequential system of handling global payments.
JPMorgan Chase, DBS Bank, and Singapore’s government-owned investment firm Temasek are collaborating to establish a blockchain based joint venture for transactions, trading, and settlements.
Partior’s goal is to create retail payments stations based on digital format banking system currency, allowing for instant transactions between financial institutions. It would aim to disrupt the conventional payment methods and common difficulties associated with it,
Mr. Sopnendu Mohanty, the Chief Fintech Officer at the Singapore Monetary Authority (MAS), said
“The Partior launch is a worldwide watershed for digital currencies and a transformation from pilots and experiments to marketing and live adoption,”
According to the venture capital firm, this would aid in addressing inefficiencies associated with repetitive authentication of account information by banks and other post-transaction processing and redemption operations. 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,”
The network will use blockchain – based smart contracts to allow banks worldwide to perform real-time worldwide transactions, with an emphasis on flows in USD and SGD between the Singaporean firms and JPMorgan. The network will then be widened to include more markets and currencies.
For many years, JPMorgan has provided a blockchain-based inter-bank transactions mechanism that was used by more than 400 financial firms, as well as several of the world’s biggest banks. The network is built on the Ethereum-based Quorum blockchain.
The Wall Street titan has confirmed that its LIINK payments rails and JPM coin, now rebranded as onyx coin (ONYX), are not intended to compete with SWIFT. JPMorgan initially concentrates on promoting flows between Singapore-based banks in US dollars and Singapore dollars, with plans to extend service offerings to other markets and currencies in the future.
It will engage banks to enter the platform in order to achieve the scope needed to serve the industry. Partior is designed to work in conjunction with central bank digital currency initiatives and usage cases.
The multi-currency clearing and settlement solution, once completed, will allow for 24/7 instant settlement or atomicity, in which both payment legs succeed or fail in real-time, reducing risks and delays.
Developers notice the omission of tokenized money and JPM Coin since people want to categorize such solutions as stable coins. Instead, it’s a settlement solution in which digitized cash is used to represent bank account balances.