Facilitating increased adoption of payment versus payment (PvP)

CPMI Papers  | 
29 July 2022
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This consultative report – issued as part of the G20 cross-border payments programme – focuses on facilitating increased adoption of payment versus payment (PvP) to reduce foreign exchange settlement risk and improve cross-border payments. The report analyses the causes of non-PvP settlement, takes stock of existing and proposed new PvP solutions and suggests roles for the private and public sectors to facilitate PvP adoption.

The CPMI conducted a survey of five existing PvP arrangements and issued a call for ideas on new proposals for PvP settlement that yielded 16 responses from a range of interested parties, including existing infrastructures, global banks, new entrants and industry groups.

Based on an analysis of the industry input, the report finds that while existing PvP arrangements are available for the most-traded currency pairs and products, these solutions are not attractive to all potential users. New PvP solutions can complement the existing arrangements by expanding coverage to the retail market, and providing flexibility and functionalities such as real-time settlement or 24/7 operations, as well as supporting emerging market currencies. However, PvP arrangements face barriers to broad adoption. It is therefore key for private and public sector stakeholders, including central banks, to take on various roles to reduce these barriers. 

The CPMI invites comments on this consultative document generally and the questions set out in the document specifically. Comments should be sent to the CPMI Secretariat (cpmi@bis.org) with "PvP consultation" in the subject line by 30 September 2022. All responses will be published on the website of the CPMI. Commercial or other sensitive information should not be included in the submissions, or may be included, with redactions for publication clearly noted.

The CPMI will host two industry workshops related to this report:

  • The first workshop on 15 September 2022 at 14:00 CEST will focus on the potential roles of public sector stakeholders. The CPMI invites providers and users of FX settlement services to participate.
  • The second workshop on 22 September 2022 at 14:00 CEST will focus on the causes of non-PvP settlement and the proposed new PvP solutions. The CPMI invites only users of FX settlement services to participate.

Requests to participate in either or both workshops should be sent to the CPMI Secretariat (cpmi@bis.org) with "PvP workshop" in the subject line by 31 August 2022.