As part of a move to address the challenges with the current interbank settlement structure, JPMorgan Chase & Co. has joined forces with two Asian financial giants.

The American giant is teaming up with Temasek Holdings and DBS Holdings to launch a blockchain-based platform to redefine value transmission for trade, payments, and foreign exchange settlement.

The platform is dubbed “Partior,” per a Bloomberg report. The platform aims to reimagine the conventional cross-border payments ‘hub and spoke' model, which has led to several issues in transactions.

Partior would focus on challenges, including multiple validations on payment details by banks, which normally leads to costly and tedious post-transaction exception handling and reconciliation activities.

Partior, which is Latin for “ to distribute and share,” would also play a role in creating wholesale payment ramps on digitized commercial bank money to allow for ‘atomic’ and real-time payment settlements for financial transactions.

In speaking on the initiative, CEO of DBS Bank, Piyush Gupta, noted that the current standard in global payments often led to delays as confirmations from several participating parties in the transaction are needed before the process is finalized.

Gupta noted that this bureaucratic style usually has inherent effects and encourages inefficiencies in settlements. However, the former St. Columbia’s alumnus noted that blockchain solutions like Partior could solve these multiple points of friction.

The first step for Partior founding companies is to scale the regulatory hurdles surrounding the platform's development, launch, and availability of services.

The financial investment firms also noted that the proposed platform would allow financial institutions to co-create applications that will support foreign exchange payments versus payment (PVP), delivery versus payment (DVP), and peer-to-peer (P2P) escrows.

Partior would be designed with central bank digital currencies (CBDCs) in mind. This would see Partior being deployed in supporting the global development of these fiat replicas and their use cases.

Partior's CBDC add-on is just a signal of the growing need for a state-sanctioned digital currency, as pointed out by experts.

In a 2020 pandemic year that has seen the cryptocurrency market boom, many financial experts have called on national banks to make adjustments in how money is issued and spent given changing market demands.

A publication by the European Central Bank (ECB) revealed a growing demand for CBDCs, with 43% of respondents prioritizing privacy in a digital Euro.

Also, a quarter of the respondents said that a digital Euro would enable faster and cheaper cross-border payments. Another two-thirds said it should be integrated into the extant banking systems for easy use.

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