JP Morgan, DBS Bank and Temasek to form new payments platform
JP Morgan, DBS Bank and Singapore government-owned investment firm Temasek have teamed up to create a new joint payments venture.
The newly established blockchain-based company is called Partior, which means ‘to distribute and share’ in Latin.
It aims “to disrupt the traditional cross-border payments ‘hub and spoke’ model”, says JP Morgan in a statement published on Wednesday. The hope is to create a more efficient digital clearing and settlement platform.
JP Morgan claims this ‘hub and spoke’ model has long fuelled an array of common pain points.
The most prominent being the friction of multiple validations on payment details by banks, which in turn drives up the cost of post-transaction processes like reconciliation.
As well as making settlement of funds easier, the venture also intends to develop wholesale payments rails for digital assets. Or as JP Morgan describes it, “digitised commercial bank money”.
Sopnendu Mohanty, the Monetary Authority of Singapore’s (MAS) chief fintech officer, says Partior marks “a move from pilots and experimentations towards commercialisation and live adoption”.
The platform will start by facilitating flows between Singapore-based banks in both USD and SGD. It later intends to expand into new markets and currencies.
The three firms also intend to build Partior in a way which will complement ongoing central bank digital currency (CBDC) initiatives.
JPMorgan’s blockchain history
JP Morgan launched its enterprise blockchain platform, Quorum, in 2016. It has since served clients with an Ethereum-based enterprise business network.
A year later, the bank played a part in founding the Enterprise Ethereum Alliance. The alliance builds, promotes, and supports Ethereum-based technology best practices.
In August 2020, JP Morgan sold Quorum to its long-term partner ConsenSys.
Rumours of the sale first began in February of that year. Many speculated that a bank wasn’t the right environment for a large scale open-source software project – much like the one JP Morgan is now endeavouring on with DBS and Temasek.
JP Morgan announced plans to launch its own digital currency, ‘JPM Coin’, back in February 2019. Pegged to the dollar, it facilitates the bank’s interbank payments instantly.
It processed its first commercial transaction with it more than a year later, in October 2020.
The bank has since partnered with Russian banking giant Sber to help it unveil its own digital currency sometime this year.
In May, JP Morgan also became the first of its size in the US to serve Bitcoin exchanges Coinbase and Gemini, according to the Wall Street Journal.
Takis Georgakopoulos, the bank’s global head of wholesale payments, says JPMorgan has formed a new business unit, Onyx, to focus on platforms like joint venture Partior.
“After five years of being a partner in Project Ubin, we are thrilled by the launch of Partior,” he says.
Project Ubin is an industry initiative set up by the MAS. It has explored the application of blockchain technology to multi-currency payments and settlements.