TassatPay, a startup with a blockchain platform for B2B payments, raised $40 million in funding earlier this month that hasn’t yet been publicized. Yesterday it launched its Digital Interbank Network (“The Network”) to enable U.S. banks to settle payments with each other in real-time 24/7 using tokenized bank money as digital dollars.
The company hasn’t come out of nowhere. Two U.S. banks, Silvergate Bank and Signature Bank, have become the go-to banks for cryptocurrency companies. Signature Bank has its Signet network, which enables its customers to settle in real-time between each other. Signet is powered by TassatPay using an enterprise blockchain version of Ethereum.
Other clients include Customers Bank and Western Alliance Bank, and the company says its technology has processed more than $350 billion in payments to date.
With the Digital Interbank Network, each participant bank would have a similar setup to Signet for intrabank payments.
“TassatPay operates in individual private blockchains at each bank while The Network utilizes a blockchain permissioned by member banks, both of which are safer and more secure than public blockchains or stablecoins, even ones issued by banks,” said Kevin Lupowitz, Tassat’s CIO.
Yesterday TassatPay demonstrated the Network to 100 banks with plans to go live in 2022. It says it’s contributing its intellectual property to the Network, which will be owned and governed by member banks “and operate entirely within their existing regulatory requirements.”
“The Network does not require the issuance of stablecoins, nor is it an attempt to monetize a cache of stablecoins. It is effectively designed by and for banks,” said Tassat Chairman Kevin R. Greene. “We believe The Network will be a catalyst for modernizing the U.S. banking system which, in turn, will drive efficiency and innovation for the millions of businesses U.S. banks serve.”
Apart from payments, the technology supports smart contracts, foreign exchange, decentralized finance for all fiat currencies, digital assets and cryptocurrencies.
It’s by no means the only blockchain solution in the works for bank payments. Figure Technologies recently partnered with NY Community Bank to tokenize bank balances.
JP Morgan’s JPM Coin is in production for intrabank payments and its Onyx division is involved in one of the highest profile interbank projects, Singapore-based Partior, backed by JP Morgan, DBS Bank and Temasek. Another is Fnality which aims to use money deposited at central banks.
Last week, HSBC and Wells Fargo announced they’re creating an interbank network for foreign currency payments. Citi has partnered with SETL for the Regulated Liability Network, and Germany’s DekaBank has launched SWIAT, a play on the name SWIFT, with a focus on digital assets rather than just payments.
