JPMorgan has formed a new company to tackle cross-border payments using blockchain technology with Singapore state-backed fund Temasek and DBS.
The new company, Partior, was developed through a program with the Monetary Authority of Singapore. The initiative was born from the blockchain unit of the investment bank Onyx as part of the Ubin project. JPMorgan said the company could be used to help the central bank‘s digital currency pilots.
The bank will use Partior to develop a blockchain-based open industry platform for digital clearing and settlement solutions for payments, trading and foreign exchange transactions. The platform could help commercial bank money settle at “atomic” or instantaneous speeds in the future, the bank said, using smart contracts to resolve current sticking points in transactions.
Partior is the latest in a series of blockchain developments for the bank, which recently saw Onyx testing blockchain payments using space satellites.
Partior could eventually be used for CBDCs and cryptoassets as well, the bank added, fostering partnerships between the public and private sectors.
“The current hub and spoke arrangement in global payments often results in delays, as confirmations from various intermediaries are required before a settlement is considered final,” said DBS Bank CEO Piyush Gupta. “This in turn has a ripple effect and creates inefficiencies in the final settlement of other assets.”
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JPMorgan said Partior will now begin the process of involving banks to join the platform, which will be necessary for the network to reach the scale needed to benefit the industry. Temasek deputy general manager Chia Song Hwee said the fund was “encouraged” by the interest it sees so far from third parties in the project.
Partior will begin with flows primarily between Singapore-based banks in US dollars and Singaporean dollars, with the intention of expanding to other markets, currencies and CBDC trials.
Takis Georgakopoulos, global head of wholesale payments at JPMorgan, said the launch of Partior was an “important step” for the bank in the development of its blockchain.
“We believe that a shared ledger infrastructure like the Partior platform will change the way payments are cleared and settled, thanks to this first wholesale payment network based on digitalized commercial bank money,” said said Georgakopoulos.
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JPMorgan is also reportedly preparing for a bitcoin entry, with plans underway for a bitcoin-linked fund for its private clients this summer.
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