SBI Shinsei Bank of Japan has collaborated with Singapore’s Partior and Japan’s DeCurret DCP to investigate multicurrency tokenized deposits for cross-border transactions.
The trio signed a Memorandum of Understanding (MoU) on Tuesday, with the objective of creating a blockchain-based settlement framework capable of real-time clearing in various currencies, as stated in their announcement.
DeCurret operates the DCJPY platform, which enables Japanese banks to issue tokenized deposits denominated in yen. SBI Shinsei aims to broaden its scope beyond the Japanese yen by introducing tokenized deposits in other major currencies to cater to the rising demand for expedited international payments.
Partior offers a multicurrency settlement infrastructure already utilized by leading financial institutions such as JP Morgan, DBS, Deutsche Bank, and Standard Chartered. The platform currently supports US dollars, euros, and Singapore dollars and aims to incorporate the Japanese yen within this partnership.
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24/7 global settlement network
The collaboration aims to establish a settlement system operational 24/7. SBI Shinsei will concentrate on the issuance aspect, while DeCurret will link its DCJPY system to Partior’s global network, and Partior will integrate yen support into its platform.
“The three companies will soon commence discussions to outline specific roles and responsibilities, intending to finalize a formal business collaboration agreement at an early date,” as mentioned in the announcement.
If successful, this initiative could provide an alternative to traditional correspondent banking, which involves a correspondent bank maintaining an account for a respondent bank and managing its payments. By leveraging distributed ledger technology, the initiative aims to minimize settlement times and costs.
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Project Agora targets tokenized payments
Last year, the Bank for International Settlements (BIS) initiated “Project Agora” in collaboration with central banks from France, Japan, South Korea, Mexico, Switzerland, the UK, and the US Federal Reserve. This project seeks to link tokenized commercial bank deposits with tokenized wholesale central bank money through a unified ledger concept.
The objective is to enhance global payments, alleviate cross-border inefficiencies, and enable smart contract functionality while maintaining the two-tier banking system.
Project Guardian, spearheaded by Singapore’s central bank (MAS) in partnership with major financial institutions, is another significant initiative focused on leveraging tokenization to boost speed, transparency, and efficiency in lending, securities trading, and forex transactions.
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