DBS, J.P. Morgan and Temasek have announced plans to develop an open industry platform to digitalize interbank value movements for payments, trade and foreign exchange settlement via a newly-established technology company.

The company, Partior, seeks to address the need for more efficient digital clearing and settlement solutions across the banking industry, through the use of blockchain technology.

Says DBS Bank chief executive officer Piyush Gupta: “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 (delivery versus payment) securities settlements on a world-class platform, with programmability, immutability, traceability built into its suite of services.”

The Partior initiative also seeks to develop wholesale payments rails based on digitized commercial bank money to enable “atomic” or instantaneous settlement of payments for various types of financial transactions. Such functionality seeks to overcome challenges presented by the current standard sequential method of processing global payments.

Sopnendu Mohanty, chief fintech officer at Monetary Authority of Singapore, notes: “The launch of Partior is a global watershed moment for digital currencies, marking a move from pilots and experimentations towards commercialization and live adoption. With its genesis from Project Ubin, a public-private partnership on blockchain and CBDC (central bank digital currency) experimentation, Partior is a pioneering step towards providing foundational global infrastructure for transacting with digital currencies in a trusted environment, spurring a wide range of use-cases in the blockchain ecosystem.”

Partior, whose operation is subject to regulatory approvals, aims to provide 24/7 infrastructure that will enable financial institutions and developers to co-create applications that support use-cases such as foreign exchange PVP (payment versus payment), DVP, and peer-to-peer escrows to complement and value-add to global financial ecosystems.

To encourage broad participation across the banking industry, Partior will be actively engaging leading banks to join the platform to establish the scale required to benefit the entire sector.

The platform will initially focus on facilitating flows primarily between Singapore-based banks in both US and Singapore dollars, with the intent to expand service offerings to other markets and in various currencies. Partior’s platform will also be designed to complement ongoing CBDC initiatives and use-cases.