DLT-based Partior network integrates with OSTTRA's peer-to-peer foreign exchange platform
In a significant development for the foreign exchange (FX) market, OSTTRA, a leading provider of wholesale foreign exchange transaction services, has partnered with Partior, a company that tokenizes commercial bank money. This collaboration aims to link two distributed ledger technology (DLT) platforms, thereby expanding the FX payment versus payment (PvP) settlement system and enhancing operational efficiency, speed, and risk mitigation in FX settlements.
According to John Stewart, co-CEO of OSTTRA, the partnership is designed to enable widespread adoption of FX PvP and extend the benefits of liquidity optimisation and settlement risk mitigation to a broader range of currency pairs and market participants. OSTTRA's workflows support matching, netting, and settlement automation, making programmable PvP possible.
Partior, on the other hand, tokenizes commercial bank money and has settlement bank partners including DBS, Deutsche Bank, Emirates NBD, JP Morgan, and Standard Chartered. The platform is available 24/7, unlike RTGS systems, providing continuous settlement capability.
The integration of OSTTRA and Partior unites the three major multi-bank international DLT platforms, including Fnality, which uses tokenized central bank reserves. Fnality's settlement system, currently in sterling, is integrated with Partior, further expanding the reach of the partnership.
Key advantages of this partnership include broadened FX settlement network, continuous settlement capability, PvP protection on tokenized funds, and enhanced regulatory compliance and transparency. The collaboration allows for 24/7 FX settlement using tokenized bank funds, reducing settlement lag and decreasing counterparty risk. The inclusion of tokenized commercial bank funds within the PvP framework mitigates settlement risk by ensuring that payment for one currency occurs if and only if the payment for the other currency occurs simultaneously.
The OSTTRA-Partior partnership is a significant next step in OSTTRA's journey towards the adoption of tokenized commercial bank assets. The OSTTRA-Baton FX PvP system has already supported $13 trillion in transactions, and the partnership has traction with HSBC and Wells Fargo. The integration and partnership with Partior is a response to the emergence of tokenized commercial bank assets as a transformative force.
In conclusion, the OSTTRA-Partior partnership advances FX PvP settlement by connecting two blockchain-based settlement platforms, enabling tokenized asset interoperability, supporting continuous settlement availability, and reducing settlement risk through enhanced PvP protections. This collaboration strengthens the FX settlement infrastructure in a digital asset context, addressing the issue of settlement risk by exchanging currency legs simultaneously.
- The integration of OSTTRA and Partior will enable the use of tokenized commercial bank assets in FX PvP settlements, further expanding the reach of the partnership and creating opportunities for liquidity optimization and settlement risk mitigation in the finance industry.
- The collaboration between OSTTRA and Partior is a response to the emergence of tokenization technology in the finance industry, particularly in the foreign exchange market, where it promises to provide insights into operational efficiency, speed, and risk mitigation through the use of digital assets.
- With continuous settlement capability and enhanced PvP protections, the OSTTRA-Partior partnership promises to revolutionize the FX settlement system, offering a significant advantage for assets, including currencies, that have been tokenized, thereby promoting the growth of the technology in the financial services industry.
