Standard Chartered to support EUR settlement via blockchain
Standard Chartered will support the settlement of Euros on a digital ledger technology (DLT) platform, after investing in Singapore’s Partior which provides the underlying technology – adding its global payments expertise and clearing footprint to the company and significantly boosting Partior’s international reach.
Standard Chartered said in a release that the investment “deepens its blockchain innovation capabilities” and “will accelerate Standard Chartered’s deployment of blockchain technology across its global wholesale payments and settlements network, scaling the utility of Partior’s technology in global capital markets.”
It will be the first bank to offer EUR settlements for any payments made on the Partior Platform.
The investment comes as banks increasingly look for alternatives to a cross–border payments world that is endemically plagued by slow transaction times and high fees via a correspondent banking network. (As Banking Circle’s Mishal Ruparel recently put it to The Stack: ““If you’re trying to send money to Australia, it’s probably quicker to fly with a bag of cash than it is to actually route the payment through the traditional network.”)
What is Partior?
Partior is an open industry platform and commercial bank network that grew from the five-year Project Ubin collaboration backed by the Monetary Authority of Singapore. Project Ubin aimed to test whether blockchain could support a superior set of rails for cross-border payments and securities transactions.
(As CEO Jason Thompson put it to DigFin’s Jame DiBiasio earlier this year, “instead of relying on a messaging system such as SWIFT to communicate terms of a transaction among a given bank’s own list of counterparties, Partior’s smart contracts can instantly shuttle a transaction to the best-execution provider.”)
It currently offers multi-currency clearing and settlement; FX Payment vs Payment (PvP); FX Intraday Swaps; and Delivery vs Payment (DvP) on the platform. Partior – which uses digitised commercial bank money rather than Central Bank Digital Currencies (CBDCs) and which has been publicly sceptical about “private” cryptocurrencies – was founded by J.P. Morgan, DBS and Temasek. It became operational in October 2021.
SGD-USD settlement in 120 seconds
J.P. Morgan provides USD settlement on Partior and DBS provides SGD settlement services on Partior. The two made a record end-to-end SGD-USD settlement in less than 120 seconds in October 2021 on Partior.
Whilst J.P. Morgan has been publicly sceptical about blockchain (albeit whilst hedging its bets), DBS and Standard Chartered have been more publicly effusive about its potential to reduce transactional friction.
Philip Panaino, Global Head of Cash, Transaction Banking at Standard Chartered said: “Our investment in Partior will allow us to deliver the speed, efficiency and visibility of domestic settlement systems to cross-border transactions, simplifying and improving the experience for our clients.” He added: “As we navigate the increasingly connected payments universe, we recognise that a concerted effort is needed. To that end, we are delighted to collaborate with industry partners who share our commitment to deliver the G20 aspirations of enhancing cross-border transactions for the benefit of citizens and economies worldwide.”
DBS, meanwhile as well as been involved with Partior, has set up the DBS Digital Exchange (DDEx), which offers tokenisation, trading and custody services of digital assets and again with Temasek and JPMC, the Climate Impact X (CIX), a global exchange and marketplace for high-quality carbon credits; and DBS Fixed Income Execution (FIX) Marketplace, Asia’s first fully digital and automated fixed income execution platform.
DBS FIX Marketplace executed 20 issuances amounting to SGD 4 billion in 2021.