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John Stewart, Co-CEO of OSTTRA, underscored the strategic importance of the collaboration with Baton Systems and the subsequent integration with Partior, highlighting a clear progression in OSTTRA’s mission to enhance FX PvP (Payment-versus-Payment) settlement. His comments reveal several key aspects of their strategy and the benefits they aim to deliver:
* Building on Previous Success: Stewart refers to the “exciting milestone” of OSTTRA’s partnership with Baton last year. This indicates a deliberate, phased approach to developing their FX PvP service, with each step building upon the previous one. The initial partnership with Baton was crucial for bringing its “game-changing technology” (DLT) to OSTTRA’s “global network.”
* Widespread Adoption of FX PvP: The core objective stated is to “enable the widespread adoption of FX PvP.” This implies a desire to move beyond niche applications and make PvP settlement accessible and practical for a much larger segment of the FX market.
* Extending Critical Benefits: Stewart emphasizes the “critical benefits of liquidity optimization and settlement risk mitigation.”
* Liquidity Optimization: This refers to enabling financial institutions to manage their cash and funding more efficiently, reducing the need to hold excessive capital for settlement purposes.
* Settlement Risk Mitigation: Specifically, this addresses Herstatt risk (principal risk), ensuring that both legs of a currency exchange settle simultaneously, thus eliminating the risk of one party paying out without receiving the other currency.
* Broader Reach: The goal is to extend these benefits to “a broader range of currency pairs and market participants.” This suggests moving beyond the most liquid pairs and major institutions to include a wider array of currencies and a more diverse set of market players, including those who may not currently use traditional PvP mechanisms like CLS.
* Transformative Force of Tokenized Commercial Bank Assets: Stewart explicitly acknowledges that “tokenised commercial bank assets are rapidly emerging as a transformative force.” This highlights OSTTRA’s recognition of the growing significance of digital assets and their potential to revolutionize financial markets. They are not viewing this as a passing trend but as a fundamental shift.
* Significant Next Step with Partior: The integration and partnership with Partior is described as a “significant next step on our journey.” This indicates that the collaboration with Partior, which brings tokenized commercial bank deposits into the settlement options, is a crucial advancement in their overall strategy.
* Acting on Early Adopter Feedback: Importantly, Stewart mentions that they are “acting on the feedback from our early adopters to provide more flexibility in settlement options.” This demonstrates a customer-centric approach, where the development of their service is directly influenced by the needs and preferences of the financial institutions already using or exploring their solutions. Providing “more flexibility” specifically refers to adding the option of settling with tokenized commercial bank money alongside other existing methods.
In summary, John Stewart’s statement positions the Partior integration as a strategic and responsive move, designed to meet evolving market demands and accelerate the adoption of enhanced FX PvP settlement. It underscores OSTTRA’s commitment to leveraging innovative technologies like DLT and tokenization to deliver tangible benefits in terms of risk reduction, capital efficiency, and broader market access.

Video courtesy of First Bank of Nigeria

Video courtesy of First Bank of Nigeria