As Partior based on blockchain allows the transfer of funds in real time 24 hours a day in S’pore – Health Guild News

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The common narrative with cryptocurrency and big banks is that they are facing each other.

After all, the very existence of cryptocurrency undermines the purpose and functions of large banks. However, the creation of Partir —A joint venture between JP Morgan, Temasek and DBS — will change all that.

Partior, an early initiative in the industry, is poised to combine the best parts of the cryptographic philosophy and merge it with the needs of the traditional banking system.

In a workshop at the Singapore Fintech Festival 2021 entitled ‘Blockchain and Big Banks: The Yin and Yang of Modern Economy’, we hear Armaan Sinha and Tiena Sekharan, both vice presidents of Onyx (from JP Morgan) about this exciting new adventure.

The defective payment system

Ask any banker and they will tell you that a bank’s payment system is extremely complicated. Contrary to popular belief, the payment systems that banks have are not as intuitive or as simple as one might think.

“The cross-border payment system is in ruins today,” Tiena said. “It’s an extremely complicated process that any cross-border transaction would involve four to five correspondent banks.”

There would be a very long settlement cycle between the time the payment starts and the time it reaches the payee.

Tiena added that there is usually a lack of transparency and visibility in the event of a delay. If money is lost, it takes even longer to find out where the money went.

You should consider different holidays and individual cut-off times with different geographies, especially when dealing with different time zones.

“It’s even possible that the two markets don’t have any overlapping time zones. And all of that causes, of course, big problems.”

This is where blockchain-based Partior comes in to help deal with all of these issues.

The perfect marriage between crypto and traditional banking

Image credit: Onyx by JP Morgan

Tiena describes Partior as “a natural extension of JPM Coin” because JPM Coin requires someone to be a JPMorgan customer. “We believe that it should be possible to access the best financial services regardless of the bank.”

Partior eliminates the convolution of the correspondent banking system and extends real-time payments 24 hours a day, 7 days a week to everyone, regardless of the bank with which you do banking.

It aims to disrupt the traditional cross-border model of concentration and radio that has led to common problems, including multiple validations. [and] checkpoints, which of course lead to costly and onerous management and reconfiguration after the transaction.

Armaan Sinha, vice president of Onyx for JP Morgan

Partior allows financial institutions to offer their corporate clients the ability to facilitate payments in any currency and in any geography in real time, 24 hours a day.

It’s your money – you should be able to transfer it whenever you want, to whoever you want. You shouldn’t limit yourself to 9:00 a.m. and 5:00 p.m. on weekdays, and Partior is something that really makes it possible.

Tiena Sekharan, vice president of Onyx for JP Morgan

It reduces settlement time and allows programmable payments such as manual transactions, co-payment with transparency, privacy, settlement purpose that traditional banking does not offer.

A shared register between banks

Temasek partition dbs jp morgan
Image credit: Onyx by JP Morgan

As a decentralized but authorized peer-to-peer network, Partior runs with a shared registration technology infrastructure that aims to have information in various banks and currencies.

It is built on Ethereum quorum, a fork of the Ethereum blockchain.

This initiative provides a strong result Ubin project of the MAS, which aims to explore the uses of the blockchain technology for currency clearing and configuration.

This shared record is located between several branches of the same JP Morgan and in the same currency. This process uses JP Morgan currency (JPM currency), a digital representation of a deposit account, which facilitates the movement of funds between JPMC branches and networks.

“Essentially, it allows customers to transfer U.S. dollars between JP Morgan branches 24 hours a day. We’re trying to expand the scope of this ledger to include multiple banks and currencies to create a shared banking network record, but within a specific region “.

There are currently six JP Morgan branches in New York, Singapore, Hong Kong, London, Luxembourg and Australia. There is only one active currency, which is the US dollar, and there are two more currencies underway.

Commercial banks participating in this platform and their customers by participating banks can make payments to and from their digital deposit accounts in the chain to deposit accounts. All this is accurately supported, in real time, 24 hours a day, 365 days a year.

It is important to note that all account balances will be treated as deposit liabilities with the trading party. And the platform does not involve the creation, retention or transfer of stable coins or other digital tokens to any participant in life.

I think as people representing traditional banks, we need to remember that Barnes and Nobles was not interrupted by WH Smith. It was discontinued by Amazon.

Therefore, it is necessary for the different banks to meet right now. Banking is a competitive business bankers are very competitive. But, it’s time for us to come together to share logbooks so we can offer the best service to our customers and that’s what Partior is trying to do.

Tiena Sekharan, vice president of Onyx for JP Morgan

JPM currency
Image credit: Onyx by JP Morgan

Companies can now deliver funds 24 hours a day, 7 days a week, all in real time. With this, there is a strong opportunity for liquidity optimization.

Typically, companies tend to keep pockets of money in multiple jurisdictions simply because they are not guaranteed the movement of funds that can happen if they have a primary account.

“There is a significant cost reduction because we are converting everything through transfers. All of this uses distributed logging technology, so it is extremely secure [and] sure, ”Armaan said.

“Given the future proof of arbitration, this system is one of the best interoperable with other blockchain networks using an API.”

Payment programmability

Because Partior allows real-time payments 24 hours a day, 7 days a day, between countries and banks, it is something that allows programmable payments.

“What I mean by this is that the Treasury working with multiple banks will no longer require you to enter each transaction manually. It is possible to automate many things,” explains Tiena.

“For example, if the balance of a particular account drops below a level you are comfortable with, the amount can be separated from another account to that account.”

If this sounds vaguely familiar, it’s because this concept is adopted from smart blockchain contracts.

Partior allows you to schedule payment, such as automated applications, and the additional payment of government funding.

“Because all of this is already in a digital account, it’s basically JP Morgan Coin and how shared registration technology will take shape,” Armaan said.

Partior is also fully interoperable. “The idea here is to make sure we are compatible with the past but we are also prepared for the future,” Tiena said.

This means that Partior will be interoperable with current RPG (risk buying) and Fedwire. He further explained that Partior would be interoperable with TERP systems, perhaps PayMet from Malaysia and UPI from India.

Partior will also be ready for the future, which means that as the central bank’s digital currency goes online, Partior should be able to interoperate with all of these platforms.

This will not be a closed system that exists in a vacuum. It will be something that interacts with the different forms of payment that exist and are already well rooted in the global payment system.

Tiena Sekharan, vice president of Onyx for JP Morgan

Because Partior is not a silatized system, all participants are operating on a single platform and this is beneficial because it makes prevalidation possible.

“It is possible to prevail over the accounts and the details of the transactions. When that happens, there are fewer mistakes later. And anyone who has worked on global cross-border payments looking for mistakes and correcting those mistakes, is the real challenge. “

Tiena has highlighted how searching for bugs takes a lot of time, consumes resources and causes delays. With Partior on a single platform, prevalidation is made possible and all these complicated processes can be avoided.

The future of Partior

Temasek partition dbs jp morgan
Image credit: Onyx by JP Morgan

Partior is not a dream, but a reality that is happening today.

“The project is a pilot phase, where we are currently transforming the US and Singapore dollars between JPMorgan and DBS in Singapore as we speak.”

These transactions are done live, as the platform is already set up. Partior focuses on construction by adding more liquidation banks, more participating banks and more companies to the system.

This new platform is poised to disrupt traditional banking and give way to a new payment system that uses the best part of the blockchain and banking chain.


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Featured image: Partior LinkedIn / Citywire Asia / Munshi Ahmed via Getty Images / Shutterstock





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