Behind the crypto project backed by Temasek, JP Morgan, DBS

Blockchain has made plenty of fans on the back of its promise to decentralize authority and cut out the go-between in financial transactions. In the world of traditional cross-border payments, however, it has gained less traction.

So when three financial industry heavyweights joined forces to build a blockchain-based wholesale payment rail for cross-border clearing and settlements, it was a sign that the tide was shifting.

Partior CEO Jason Thompson / Photo credit: Partior

Called Partior, the new payments platform in question is a joint venture by DBS, Temasek Holdings, and JP Morgan set up in April.

Based on digitized M1 commercial bank money, Partior promises to upend global payment processing by making the process faster, up to 80% cheaper, and more transparent.

In its initial phase, the platform will help move money between Singapore-based banks in both Singapore and US dollars. However, it plans to expand this to 15 currencies – including the euro, pound sterling, yen, and yuan – by 2022. It will also complement central bank digital currencies (CBDCs).

See also: Are state-backed digital currencies a game-changer?

In October, the company announced that it had achieved end-to-end settlements in Singapore and US dollars in under 120 seconds, a fraction of the dayslong clearing process many have come to expect from conventional cross-border transactions.

Headed by ex-Ovo CEO Jason Thompson, Singapore-based Partior traces its origins to Project Ubin, an experiment on blockchain clearing and settlements that was led by the Monetary Authority of Singapore (MAS). The project concluded after five years, in July 2020, with a completed blockchain-based multicurrency network prototype.

However, Partior takes this a step further. JP Morgan, DBS, and Temasek’s involvement – plus a heavy influence from Project Ubin – “gave it gravitas,” says Thompson, who stepped down from his role as Ovo’s CEO in September.

Project Ubin has given Partior “an opportunity to design a solution that understands how to operate with existing financial institutions and where efficiencies can be found, ” he tells Tech in Asia.

Refreshing an outdated system

Global cross-border payment flows are expected to reach US$156 trillion by 2022, with a compound annual growth rate of 5%, according to Ernst and Young.

But here’s the problem: That money is flowing through outdated infrastructure that costs recipients an average of US$27 in fees per transaction.

See also: Visual: The clunky affair of cross-border payments

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