The International Monetary Fund (IMF), the World Bank and the Bank for International Settlements (BIS) have carried out a comprehensive study on the use of central bank digital currencies (CBDCs) for cross-border payments. Their report to the G20 states that improved cross-border payments “can be achieved … as long as countries work together”.
- The Committee on Payments and Market Infrastructures, the BIS Innovation Hub, the International Monetary Fund and the World Bank published a joint report to the G20 on July 9, entitled “The Central Bank’s Digital Currencies for Cross-Border Payments”.
- The report states: “Cross-border payments are often criticized for their high costs, their slow speed, their limited access and their insufficient transparency.” To meet these challenges, the G20 countries adopted a roadmap in October last year. It was developed by the Financial Stability Board (FSB) and other relevant standardization bodies.
- Various aspects of central bank digital currencies (CBDCs) were analyzed in the report. This includes domestic and potential designs, current central bank considerations regarding cross-border CBDC usage, and the potential benefits and risks of using CBDCs for cross-border payments.
- Improved cross-border payments “can be achieved through varying degrees of integration and cooperation,” the report says. “The analysis underlines both the need for multilateral cooperation on macro-financial consequences and the importance of interoperability between CBDCs.”
- According to the main conclusion of the joint report:
Central bank digital currencies (CBDCs) have the potential to improve the efficiency of cross-border payments as long as countries work together.
- Many central banks are currently investigating the risks, benefits, and various designs of CBDCs, the report said, noting that no major jurisdiction has yet implemented a CBDC and many design and policy decisions remain unresolved. Some central banks are already in the test phase, such as China. The full joint report can be found here.
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