The Bank for International Settlements' Committee on Payments and Market Infrastructures (CPMI), the BIS Innovation Hub, the International Monetary Fund (IMF), and the World Bank published a joint report to the G20 assessing different options for access to and interoperability of the central bank digital currencies (CBDCs) for cross-border payments. The CPMI also published a paper on interlinking payment systems and the role of application programming interfaces. Additionally, BIS Innovation Hub and Bank Indonesia announced the shortlisted finalists for the G20 TechSprint Challenge.
The key highlights of the aforementioned publications follow:
- The joint report on CBDC identifies and analyzes different options for access to central bank digital currencies and their interoperability that could improve cross-border payments, including how they can interconnect with non-CBDC payment arrangements. The report assesses these options based on five criteria: do no harm, enhancing efficiency, increasing resilience, assuring coexistence and interoperability with non-CBDC systems, and enhancing financial inclusion. The report also discusses the key implementation challenges of broader access to CBDC systems, ranging from governance, decision-making and risk management to operational, technical, and financial aspects and key challenges for interoperability include investment and maintenance cost, scalability, legal, and regulatory frameworks and governance. The report states that there is no "one size fits all" model for access to and interoperability of CBDCs. As central banks have varying motivations for exploring or developing CBDCs, they are likely to adopt different CBDC designs and cross-border arrangements. Accordingly, the report serves as a tool for central banks to assess how to best leverage CBDCs to enhance cross-border payments in the context of their own objectives.
- The CPMI paper on interlinking payment systems provides a framework to help payment system operators and authorities understand and evaluate the benefits, challenges, and risks of interlinking arrangements. The report provides an overview of important trends in interlinking arrangements and adoption of application programming interfaces (API) by payment systems. With the introduction of fast payment systems around the world, the report highlights benefits of interlinking of payment systems that can potentially enhance cross-border payments by shortening transaction chains, supporting the harmonization of data formats and facilitating data exchanges through the use of dedicated applications as well as by reducing funding costs, limiting redundant compliance checks, and increasing competition in the provision of cross-border payment services. The report also provides payment system operators and authorities with some practical perspectives and considerations that they could reflect in their analysis of potential interlinking arrangements.
- G20 TechSprint Challenge. BIS Innovation Hub and Bank Indonesia announced the shortlisted finalists for the G20 TechSprint challenge on central bank digital currencies. Out of the 100 participating teams, 21 finalists were selected from more than 15 countries and jurisdictions, ranging from large global corporations to more specialized fintech firms. The shortlisted teams will complete their prototypes by the end of August and the winners for each of the three categories will be announced in October ahead of the G20 Summit, judged by an independent expert panel convened by Bank Indonesia.
- Press Release on Joint Report on CBDC
- Joint Report on CBDC (PDF)
- Press Release on CPMI Report on Interlinking Arrangements
- CPMI Report on Interlinking Arrangements (PDF)
- Press Release on G20 TechSprint Challenge
Keywords: International, Banking, CBDC, Central Bank Digital Currencies, Cross-Border Payments, Governance, Operational Risk, Interlinking Arrangements, API, Compliance Risk, G20, Techsprint, Fintech, Regtech, BIS Innovation Hub, World Bank, IMF, Bank Indonesia, CPMI, BIS
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