An international association for central banks has issued a report that “aims to make lasting improvements in cross-border payments.” The current problem, according to the report, is that the payments setup “can be slow, expensive, unreliable” — or even unavailable in some countries.
The move by the Bank for International Settlements (BIS) comes as Facebook gears up to launch a cryptocurrency, Libra. The report was put together by the central bank group’s Committee on Payments and Market Infrastructures (CPMI).
“The shortcomings of cross-border payments have been apparent for many years and have been thrown into sharp relief by domestic payment systems,” said Jon Cunliffe, chair of the CPMI and deputy governor of the Bank of England. “Cross-border payments are necessarily more complex than domestic payments, but we need to bring them into line with the standards, efficiency and reliability that users now have a right to expect.”
The CPMI report said that cross-border payments are set to increase from $20 trillion in 2019 to $30 trillion by 2030.
“Faster, cheaper, more transparent and more inclusive cross-border payment services would have widespread benefits for citizens and businesses worldwide, supporting economic growth, international trade, global development and financial inclusion,” added Cunliffe.
The report sets out a “global roadmap” to improve cross-border payments, with 19 building blocks. It is part of a three-stage process begun by the G20, which is made up of the governments and central bank governors from 19 countries and the European Union. The G20 has made addressing cross-border payments problems “a priority,” the report said. “While improvements to technology are one piece of the puzzle, international cooperation and collaboration will be crucial to reduce cross-border frictions,” it noted.
The first two stages of the process are complete with the issuing of the report.
For its part, the European Union (EU) is preparing to update its cryptocurrency rules, which could cause difficulties for stablecoin projects, such as Facebook’s proposed Libra.