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• CBDCs will benefit wholesale digital payments if they are made interoperable for cross-border transactions, report said
Global legislation would allow Central Bank Digital Currencies (CBDCs) to operate effortlessly cross-border and speed up wholesale payments, a think tank backed by the City of London Corporation said on Friday.
Most central banks, including the US Federal Reserve, the Bank of England (BoE) and the European Central Bank (ECB), are reviewing the potential launch of a digital version of fiat currencies.
While Britain has said any digital version of sterling would not be available under the second half of this decade, the Fed has said a digital dollar could help maintain the greenback’s international standing.
“Key to realising the full potential of CBDCs is ensuring that they can operate across different markets to facilitate wholesale cross-border payments,” said Kay Swinburne, chairperson of the International Regulatory Strategy Group (IRSG), a think tank backed by the municipal governing body of the City of London.
“Global regulatory principles and collaboration will be needed to realise this vision.”
The IRSG, in the report titled ‘The Use of Central Bank Digital Currencies (CBDCs) in Wholesale Market’, said there are many benefits to including CBDCs in wholesale digital payments if they are made “interoperable” for cross-border transactions.
Harmonisation of regulations would allow firms who are licensed in one jurisdiction to provide services in another and stop countries trying to undercut each other with laxer rules, the report said.
Picture Credit: Forbes
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