As more and more cryptocurrency companies are being created, the interest in the decentralized technology behind these digital assets is starting to become the main focus of mainstream media. Of course, with so much focus on blockchain and blockchain-based assets, it’s only a matter of time before the big banks and financial institutions decide to implement blockchain technology in their preexisting infrastructure. A recent report from the Financial Times revealed that three of the world’s leading banks, JPMorgan, DBS, and Temasek Holdings based out of Singapore, have announced that they have started a joint venture to develop and deploy a blockchain-based payments system.
US investment bank JPMorgan has partnered with Singapore-based DBS Bank and holding company Temasek to develop a blockchain-based interbank transfer system called Patrior that aims to eliminate some of the industry’s most common problems.
We are confident that a shared ledger infrastructure such as the Partior platform will change the way payments are cleared and settled with this first wholesale payment system based on digitised money from commercial banks, Takis Georgakopoulos, global head of wholesale payments at JPMorgan, said in a statement.
The new platform, created in partnership with DBS and Temasek, will use blockchain technology to speed up cross-border payments, trade transactions and currency settlements. https://t.co/zxfCC7RUdT pic.twitter.com/Xu7nWcEJPh
– J.P. Morgan (@jpmorgan) April 28, 2021
According to a press release earlier this week, most modern cross-border payment systems are based on the so-called hub-and-spoke model, a paradigm in which the distribution channels of something are set up as a series of spokes connecting distant locations to a center.
In the context of the rise of decentralized technologies, these traditional systems are quickly becoming obsolete and leading to common pain points, such as banks repeatedly checking payment data, leading to costly and time-consuming exception reprocessing and reconciliations, bankers explain.
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To address these challenges, blockchain-based Patrior aims to improve the efficiency of digital interbank clearing and settlement by providing a next-generation programmable value transfer for member banks and their customers in real time on an open industry platform.
The current hub-and-spoke pattern in global payments often leads to delays as confirmation from various intermediaries is required before settlement can be considered final, said Piyush Gupta, CEO, DBS Bank : Using blockchain technology and smart contracts, the Partior platform will eliminate existing friction points.
He said Patrior will support real-time international payments in multiple currencies and trade finance, as well as foreign exchange and securities settlements conducted on a delivery-versus-payment basis.
We are excited to be working with DBS and J.P. Morgan on a global platform that will have a tangible impact on payments worldwide. Finding the right approach to transforming payments with new technologies must be a priority as we take our existing infrastructure to the next level of digitisation and connectivity, added Temasek’s deputy general manager, Chia Song Hwee.
As mentioned, JPMorgan recently opened 64 positions for blockchain engineers specializing in Ethereum, Corda and Hyperledger development.
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