Cross-border and cross-currency payments

This chapter examines the current inefficacious condition of cross-border payments and the challenges they pose to users and oversight authorities. In particular, it analyses the causes and implications of the ongoing decline in correspondent banking. It distills the Building Blocks in the G20 Roadmap to Cross-Border Payments , the progress made at the transnational level in their implementation, and the remaining obstacles. The discussion encompasses recommendations that are exploratory in nature, including the feasibility of new multilateral cross-border payment platforms and arrangements, the soundness of global stablecoin arrangements, and factoring an international dimension into the design of central bank digital currencies (CBDCs). The chapter suggests that, while the G20 Roadmap is comprehensive, it lacks certain elements, including the potential for utilising distributed ledger technology (DLT) to enhance the efficiency, speed, and safety of cross-border payments. It draws on theories of technology and innovation adoption to analyse DLT adoption for cross-border payments and the regulatory approach that should be taken to facilitate its use. Alongside the benefits of stimulating economic growth and enhancing financial inclusion over the long term, it explores the regulatory, legal, and institutional barriers that DLT infrastructure may present for cross-border payments.