Options for access to and interoperability of CBDCs for cross-border payments
Joint report to the G20 by the Bank for International Settlements' Committee on Payments and Market Infrastructures, the BIS Innovation Hub, the International Monetary Fund (IMF) and the World Bank.
Central banks must make critical choices on the access of non-residents and foreign financial institutions to central bank digital currencies (CBDCs), as well as ensuring multinational interoperability, to fully harness the potential for CBDCs to enhance cross-border payments. This is the main conclusion of a joint report released by the BIS Committee on Payments and Market Infrastructures, The BIS Innovation Hub, the IMF and the World Bank.
For central bank digital currencies (CBDCs) to improve cross-border payments, central banks must make fundamental decisions on foreign access and how CBDCs connect across jurisdictions. These decisions must be made at an early stage and international cooperation and coordination are prerequisites. That is the main conclusion of a joint report released today by the Bank for International Settlements' Committee on Payments and Market Infrastructures, the BIS Innovation Hub, the International Monetary Fund (IMF) and the World Bank.
The report identifies and analyses options for access to CBDCs and their interoperability that could improve cross-border payments, including how they can interconnect with non-CBDC payment arrangements. Each option have different implications, for example for efficiency, resilience and financial inclusion. The report also discusses the implementation challenges of each of the options.
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.