The emergence of new players such as Libra has thrown into sharp relief how slow, expensive and unreliable traditional cross-border payments can be, says a Bank for International Settlement committee report which also offers some ideas for improving the situation.
BIS's Committee on Payments and Market Infrastructures (CPMI) has put together the report in response to Saudi Arabia making the improvement of cross-border payments a priority of its G20 presidency.
The report offers 19 building blocks for resolving the longstanding frictions and challenges in cross-border payments, which have been left behind by improvements in domestic payments and could soon be disrupted by new entrants such as Libra.
The stated aim is to make them faster, cheaper, more transparent and inclusive. To do this, the report highlights five focus areas: a commitment to a joint public and private sector vision; regulatory, supervisory and oversight coordination; improvement of existing payment infrastructures; enhancing data quality; and exploring the potential of new payment infrastructures.
Jon Cunliffe, CPMI chair and deputy governor of the Bank of England says cross-border payments need to be brought into line with the "standards, efficiency and reliability that users now have a right to expect".
Continues Cunliffe: "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."
The report is the second of a three-stage process. The Financial Stability Board will now coordinate a full roadmap to be delivered to G20 finance minister and central bank governors in October.
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