OSTTRA announced that Partior has joined its FX payment versus payment (PvP) settlement system, creating a bridge between two distributed ledger technology (DLT) settlement platforms.
Last year OSTTRA partnered with Baton Systems to launch the FX PvP system, which already had traction with HSBC and Wells Fargo. Between OSTTRA and Baton the solution has supported $13 trillion in transactions. Partior tokenizes commercial bank money and counts DBS, Deutsche Bank, Emirates NBD, JP Morgan and Standard Chartered among its settlement bank partners, currently supporting USD, EUR and SGD.
While CLS handles the majority of wholesale foreign exchange transactions, around $2.2 trillion daily settles outside the system, much of it exposed to settlement risk. PvP addresses this by exchanging currency legs simultaneously. OSTTRA’s workflows support matching, netting and settlement automation, enabling programmable PvP.
Expanding the DLT ecosystem
The integration unites the three major multi-bank international DLT platforms, following Fnality’s integration with OSTTRA last month. Fnality’s settlement system uses tokenized central bank reserves, currently in sterling.
The partnership expands options for all participants. The OSTTRA system uses DLT for workflow but works with native commercial bank money without tokenization. By contrast, Partior tokenizes commercial bank money. The integration allows one transaction leg to use tokenized cash while the other uses conventional fiat. The Partior banks need to have Nostro accounts with HSBC and Wells Fargo.
So what’s the benefit? With any ecosystem, but especially with FX, the number of members and the resultant liquidity is crucial. These alliances encourage the participants of each platform to join the others, expanding the range of counterparties to create that critical network effect.
For Partior, the partnership will immediately extend the range of currency pairs beyond those involving its initial three, to whatever is supported by OSTTRA. It also indirectly integrates Partior with Fnality by both being available on the common network.
A key Partior benefit is that it is available 24/7, unlike RTGS systems.
“We set out to combine the global OSTTRA network with Baton’s game-changing technology to enable the widespread adoption of FX PvP, extending the critical benefits of liquidity optimisation and settlement risk mitigation to a broader range of currency pairs and market participants,” said OSTTRA co-CEO John Stewart. “With tokenised commercial bank assets rapidly emerging as a transformative force, the integration and partnership with Partior is a significant next step on our journey.”
