Bank of Canada, Bank of England, MAS on digital transformation in cross-border payments

The report, “Cross-border interbank payments and settlements: Emerging opportunities for digital transformation”, examines existing challenges and considers alternative models that could in time result in improvements in speed, cost and transparency for users.

What is more, the report provides an initial framework for the global financial community to assess cross-border payments and settlements in greater depth. Specifically, it discusses how a variety of payment models could be implemented, from both a technical and non-technical perspective.

The report examines three models of cross-border payments. The first two are built on existing domestic interbank payment systems using traditional technology. The third model focuses on the use of Wholesale Central Bank Digital Currency and its various applications through distributed ledger technology. The models could be used to improve access, speed and transparency of cross-border payments. However, the report finds that further work would be required, by both industry and regulators, if the models were to be developed further. Future areas of focus could include implementation and policy challenges.

The project involved collaboration among the three central banks, who were supported by a group of financial institutions led by HSBC. Contributors included Oversea-Chinese Banking Corporation (OCBC Bank), The Toronto-Dominion Bank (TD), United Overseas Bank (UOB) and Payments Canada. It builds on previous research projects such as Project Jasper by the Bank of Canada and Project Ubin by the Monetary Authority of Singapore, which explored tokenised forms of central bank liabilities for domestic transactions.