In a significant move for the fintech landscape, SBI Shinsei Bank has formed a partnership with Partior, a Singapore-based blockchain company, and DeCurret, a Japanese crypto exchange. Together, they aim to develop a novel method of multicurrency tokenized deposits designed specifically for cross-border transactions. This collaboration was formalized through a Memorandum of Understanding (MoU) signed on Tuesday, reflecting a commitment to leveraging blockchain technology for efficient banking solutions.
The initiative focuses on creating a blockchain-based settlement framework capable of facilitating real-time clearing across multiple currencies. The participating institutions believe that this innovation will enhance the speed and lower the costs associated with international payments. Currently, DeCurret operates its own platform, DCJPY, which permits Japanese banks to issue tokenized deposits in yen. However, SBI Shinsei has plans to extend beyond the Japanese currency to accommodate other major global currencies due to increasing demands for expedited international transactions.
Partior is instrumental in this collaboration, bringing its established multicurrency settlement infrastructure that is already utilized by several major financial institutions, including JP Morgan, DBS, Deutsche Bank, and Standard Chartered. The platform currently supports transactions in U.S. dollars, euros, and Singapore dollars, and is set to incorporate the Japanese yen into its offerings through this new partnership.
The collaboration aims to establish a 24/7 global settlement network, a crucial element in today’s fast-paced financial environment. SBI Shinsei will handle the issuance of tokenized deposits, while DeCurret will facilitate the integration of its DCJPY system into Partior’s international network. Concurrently, Partior will work to incorporate support for the yen into its existing platform. Together, the three companies plan to enter into detailed discussions to define their roles and responsibilities, with an emphasis on formalizing a business collaboration agreement in the near future.
If successful, this venture could provide a disruptive alternative to the traditional correspondent banking model, which typically requires a correspondent bank to manage an account on behalf of a responding bank. By employing distributed ledger technology, the proposed system seeks to minimize settlement times and reduce associated costs, potentially revolutionizing the nature of cross-border banking transactions.
This initiative comes on the heels of various global efforts to harness tokenization in banking and finance. Last year, the Bank for International Settlements (BIS) rolled out Project Agora, in partnership with several central banks including those in France, Japan, South Korea, Mexico, Switzerland, the United Kingdom, and the U.S. Federal Reserve. The project endeavors to unify tokenized commercial bank deposits alongside tokenized wholesale central bank money using a cohesive ledger framework. Such efforts are aimed at streamlining global payments, curtailing inefficiencies in the cross-border payment landscape, and enabling smart contract functionalities within the existing two-tier banking system.
Additionally, the Project Guardian, spearheaded by Singapore’s Monetary Authority (MAS) in conjunction with significant financial entities, underscores a similar commitment to improve the efficiency, transparency, and speed in sectors like lending, securities trading, and foreign exchange transactions through tokenization.
This emerging partnership between SBI Shinsei Bank, Partior, and DeCurret represents another step forward in the ongoing evolution of the financial industry, blending traditional banking practices with innovative blockchain solutions to enhance global payment processes.
