The International Monetary Fund (IMF) is creating a new class of platforms for cross-border and domestic payments in central banks’ digital currencies
The International Monetary Fund (IMF) has begun developing an infrastructure for international central bank digital currency settlements (CBDC). A report released by the fund on June 19 said. That the new class of platforms is designed to ensure interoperability. As well as the efficiency and security of cross-border payments.
“Today’s new technologies allow the public sector to update cross-border payments infrastructure, and possibly domestic payments as well. <…> It’s about technology, but also about governance, which sets the “rules of the game”. This was stated by Tobias Adrian, head of the IMF Monetary System Department and one of the authors of the report, speaking at the IMF roundtable in Morocco before the publication of the document.
Trans-border payments are more complicated than domestic ones. Because they involve an exchange of value between parties located in different jurisdictions. And also subject to different laws, Adrian said. According to him, limited infrastructure makes international settlements expensive, slow and non-transparent. And the management of the existing system is “sporadic. And that leads to significant legal and operational costs.
According to the report, the IMF work on a new class of platforms is being done to speed things up. And also to make remittances between countries easier and cheaper. Experts are developing two types of platforms: for international settlements in CBDC and for domestic ones.
Trans-border settlements in tokens representing the reserves of member countries’ central banks will be provided by platforms called XC, according to an IMF report. They “create representations” of existing assets – reserves held by central banks, the authors explain.
Our experts note that another solution – CBDC platforms – is being developed to facilitate domestic payments in digital national currencies, both wholesale and retail. The report’s author emphasizes that such platforms will be supported by a strong regulatory framework.
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