J.P. Morgan, DBS Bank to Work on Blockchain-Based Payments Platform
- The new company, called Partior, will use blockchain and digitised commercial bank money to disrupt the traditional payments model.
- Partior will also be designed to complement ongoing Central Bank Digital Currencies initiatives and use cases.
J.P. Morgan headquarters in Warsaw, Poland, 8 April 2018. Shutterstock
Investment bank J.P. Morgan has partnered up with DBS Bank and investment firm Temasek to launch a new blockchain-based joined venture focused on global payments and interbank transactions, J.P. Morgan announced on 28 April.
According to the press release, the new firm, called Partior, will try to disrupt the traditional payments model through the use of blockchain technology and digitised commercial bank money. The aim of Partior is to reduce the friction in cross-border payments by developing a wholesale payment rail that will enable instantaneous settlement between financial institutions. The CEO of DBS Bank, Piyush Gupta, explained:
“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 platform Partior will develop will be based on Tamasek and J.P. Morgan’s work on Project Ubin, the Monetary Authority of Singapore’s (MAS) blockchain-based payment initiative. It will enable banks around the world to conduct real-time cross-border transactions through the use of blockchain and smart contracts.
The platform will initially focus on facilitating flows between Singapore-based banks in both USD and SGD, but will later extend to other markets and various currencies. The past experience on Project Ubin will also help the Partior design its platform to complement ongoing Central Bank Digital Currencies (CBDCs) initiatives and use cases.
This is not the first time that J.P. Morgan has worked on a blockchain-based interbank payment system. The investment bank has already spent several years on its LIINK system — previously known as the Interbank Information Network — which has been joined by over 400 financial institutions.
- Launched in 2020, the bank’s permissioned blockchain-based value transfer system, called JPM Coin, now handles around $1 billion in daily transactions.
- The bank’s global head of payments said they now plan to widen the usage of the coin, and possibly create a “more retail version” of the token.
The corporate sign in front of the JP Morgan Chase & Co office building on Park Avenue, New York City, October 29, 2016. Felix Lipov/Shutterstock
- The Monetary Authority of Singapore successfully completed a cross-currency transaction using DeFi technology as part of its Project Guardian initiative.
- Singapore’s DBS Bank, Japan’s SBI Digital, and J.P. Morgan all participated in the trials that were conducted on the Polygon blockchain.
- Called Project Guardian, the new MAS pilot will be led by financial heavyweights J.P. Morgan, DBS Bank, and Marketnode.
- The first pilot of the project will explore DeFi applications in wholesale funding markets through the creation of liquidity pool of tokenized bonds and deposits.