Today Singapore’s largest bank DBS, JP Morgan and Singapore’s state-owned investment firm Temasek announced the creation of a joint venture, Partior, to develop a wholesale blockchain-based payment network targeted at cross border transactions. The solution, first unveiled in December, will enable many commercial banks to digitize deposits creating programmable money for cross border payments, trade transactions and foreign exchange settlement.
Once developed, the multi-currency clearing and settlement solution will enable 24/7 instant settlement or atomicity, where both payment legs succeed or fail in real-time, thereby reducing risks and delays. We note the avoidance of mentioning tokenized money and JPM Coin because people tend to pigeonhole such solutions as stablecoins. Instead, this is a settlement solution where digitized cash represents bank account balances.
“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,” said Piyush Gupta, CEO of DBS. “This in turn has a knock-on effect and creates inefficiencies in the final settlement of other assets.”
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