Partior Sets Sights on the Future of Global Money Movementby Johanan Devanesan February 16, 2023
Partior is a blockchain-based exchange platform, a fintech company operating within the exciting Web3 space that is being hailed as the future of the internet. Blockchain technology provides a secure and decentralised ledger that can be used to record and track financial transactions, including the exchange of digital assets.
Partior spun out from Project Ubin, a collaborative effort between the Monetary Authority of Singapore (MAS) and the fintech industry based in the island state. The recently concluded five-phase project helped regulators like MAS and the industry at large better understand the use of blockchain and distributed ledger technology (DLT) in practical settings.
Partior core stakeholders DBS, JP Morgan and Temasek just joined the company’s Series A investment round led by UK bank Standard Chartered, raising US$31 million for the blockchain-enabled payments clearing and settlements platform. The same investor trio also helped build up Project Ubin, so they stepped back and identified “very clear problem statements around money movement, cross-border, and how in the future of a tokenised world, things like Delivery versus Payment (DvP) capabilities would be inhibited if money continued to move as it does today,” said Jason Thompson, Partior CEO, in an exclusive chat with Fintech News Singapore.
A lot of original Ubin (it has since been succeeded by Ubin+ in November 2022) projects ended up being theoretical, with not enough value being created from all the knowledge sharing and white papers that were published, according to Jason.
By using blockchain technology, Partior aims to offer a programmable, secure and transparent platform for exchanging cryptocurrencies, multi-currencies, and other digital assets. Harnessing key attributes of DLT, smart contracts and decentralised applications (dApps), the exact features and services offered by Partior will depend on the specific implementation of their platform.
“I think the area we’re in, in a Web3 business that’s really looking at the future of value exchanges globally. It’s a complex landscape,” surmised Jason.
Partior the future of global money movement?
Besides DvP, foreign exchange Payment versus Payment (PvP), and Peer to Peer escrows, Partior will also support both central banks and commercial banks with the market infrastructure and value–added financial services that Partior’s CEO sees as the future of a Web3-based, globalised value exchange. Enabling interoperability between different asset classes, such as between commercial bank money and digitised central bank money, will be one of those key pillars for the future of money movement.
“Today, probably 80% of liquidity in somewhere like the US comes from commercial banks. So we still see that the future of money movement will be heavily reliant on the liquidity of the large clearing banks,” explained Jason. “And I think, you know, in recent months it’s become evermore clear that some of the assets that would potentially be seen as other options for liquidity, are really not evolved at a regulatory level that would allow it to be safe to do so.”
He points out that “99.9%” of money that moves around is still fiat, so tokenisation and digitalisation of existing monetary systems still needs to happen. “So today, we have a very clear five-year vision statement that we have aligned with our key partners and our investors,” he said. “But our vision is for us to become a third global ledger that underpins the world payment systems. Now, when we say payment systems, it’s really how we interoperate with all value exchanges.”
“A global network from day one”
In the coming years, money movement will be increasingly dependent on the usage model. “So for instance, we could be moving money, but that money could be because of an exchange of a tokenized bond,” Jason explained. “So money movement and value exchanges now have to happen simultaneously and atomically, that can’t be disintermediated in this new world.”
“The network itself is private and permissioned. That means we’re not a public network like other organisations, and indeed, the ledger itself is private and permissioned. We’re building a global network from day one,” he said. “We’re a global company and that network is made up of settlement banks, participating banks, central banks and liquidity providers. And it really helps us expand them into other fintechs that can support the ecosystem and how it grows.”
Partior aims to allow for secure, interoperable settlements and payments across the landscape, using DLT to eventually bridge even legacy systems and future-ready them. “I think when you look at tokenisation of assets, and when you look at the digitalisation of money movement, the financial services industry is going through a change right now that is akin to the electric vehicle market.”
Jason sees Partior right at the centre of this change, integrating every liquidity solution from CBDCs to M-zero, cash or assets that could quickly be converted into currency, on Partior’s private permissioned ledger. “This is the first generation open ecosystem; there’s nothing of its kind. So it’s a distributed network methodology,” he said.
Interoperability and decentralising risk
Partior doesn’t actually host, store or move the money, nor does it create settlement finality or acquire any data. “We provide the facility for that to happen,’ Jason explained.
“We don’t centralise risks in any way. We decentralised risk and the policy is decentralised as it is today. So we provide atomic clearing and settlement with tokenised and digitised liquidity. We provide proprietary and third party applications for things like FX PvP and intraday swaps. And we’re also in the process of building delivery versus payment, DVP. So we can integrate our payments into the transfer of assets,” he went on.
So besides multi-currency and liquidity management on a global private permissioned ledger, interoperability for DVP and the transparency of asset custodianship from A to B can all be integrated onto a single ledger. “We’re working with organisations across the world, including Big Tech, to deliver a scalable and robust network. So we’re not working in isolation. And … we’re creating interoperability through things like standard APIs, API adapters, and also network bridges. So third party organisations can also utilise the chain and serve their clients.”
Jason is very aware that he needs to build this company for the tomorrow of global value exchanges, not just today. As the former senior managing director of Grab Financial and the former CEO of OVO, Indonesia’s leading payments platform, Jason says that a similar situation could play out with Partior where it would scale and grow rather rapidly – now that their platform has evolved from a rudimentary proof-of-concept stage to “a robust platform that supports global value exchanges.”
Collaboration in innovation
Partior ’s increased funding comes at an opportune time, as it works with a broad ecosystem of technology partners to troubleshoot and ensure every asset registration, every custodian slip is immutably recorded on that ledger. Partior works closely with Microsoft on the future of secure computing,Vault by HashiCorp for identity and access management, and many others in bolstering its network.
“Obviously, the other cloud providers are massively important to us, particularly AWS, but we’re building a very large ecosystem of technology providers,” he elaborated. “Now the reason being, this is a global technology problem. You cannot do it on your own. It’s just impossible.”
Evolution of regulatory policies, AML procedures, risk and operational guidelines differ from country to country, too, and so Partior is forming partnerships with institutional bodies as well as technology allies. The system’s smart contracts facilitate the relationships between different aspects of the network, with a proportion existing within participating banks, another part completely distributed including certain applications, and a hosted part of the network where the transaction sequencing and network performance is optimised.
A global business
When it comes to fraud and risk management, Partior takes what it calls a “federated approach” as there is no “one size fits all” method to solving this internationally. “Now, the smart contract facilitates that [the AML for a transaction to clear a particular country], but essentially we take a federated approach, where in some countries will connect directly to our TGS; in some countries, will go directly to the biggest bank and the central bank,” Jason elaborated. “And that will depend on policy and also the evolution of policy.”
Essentially, in regions where Partior’s smart contracts align with local policies, the transactions can be processed much faster, and Partior upholds the policies of the most recognised entities, such as the Federal Reserve in the US.
Ultimately, while Partior is headquartered in Singapore, Jason says they are a global business. And to that end they look to be established in all the major financial markets worldwide, with a large and surprisingly senior management team facilitating the transition between traditional financial institutions and the newer Web3 world of tokenised assets.
Jason highlighted how several big announcements are coming from Partior in the next few months, but his team is very focused on first, solidifying its core business and technology. “Number two, create network density. You can see trade finance and things like that come in. And phase three, which is really around how we interact, become more interoperable, and more usable,” which will define Partior as a Web3 fintech heavyweight in the next few years, central to the global money movement and asset value exchange market.