The Bank of Canada, Bank of England and Monetary Authority of Singapore share assessment for digital transformation in cross-border payments

Published 

Singapore – The Bank of Canada, Bank of England and Monetary Authority of Singapore (MAS) have today jointly published a report which assesses alternative models that could enhance cross-border payments and settlements. The report examines existing challenges and considers alternative models that could in time result in improvements in speed, cost and transparency for users.

The report, “Cross-border interbank payments and settlements: Emerging opportunities for digital transformation”, 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.

 Scott Hendry, Bank of Canada Senior Special Director, Financial Technology, said, “There is significant room for improvement in the cross-border payments space. Major changes are being proposed by current service providers as well as start-ups that regulators need to research to better understand. This project was a major step forward in international cooperation and in our understanding of the possible alternatives.”

Victoria Cleland, Bank of England Executive Director for Banking, Payments & Financial Resilience, said, “The ability to make secure and efficient payments is key to the strength of the financial system, and important for consumers and businesses. Many national payment systems are benefiting from considerable innovation and change. In this context it is important that cross border payments, which totalled 1.8 times global GDP in 2016, are enhanced too. They are at the centre of the international financial system; enabling trade, investment and money transfers. This report, which is itself a great example of international collaboration, provides a foundation that will enable further exploration of how innovation could improve this crucial aspect of finance.”

Sopnendu Mohanty, Chief FinTech Officer, the Monetary Authority of Singapore, said, “Payments infrastructure have rapidly improved over the last few years. Domestic transfers can now be completed almost instantly and at low cost. With this as an aspirational benchmark, there is a huge opportunity to improve cross-border payments. This collaborative effort by the central banks and financial institutions across the three jurisdictions helps us identify gaps and areas of improvements in cross-border payments, and sets the foundation for further technical experimentation.”

Diane S Reyes, Group General Manager and Global Head of Global Liquidity and Cash Management at HSBC, said, “HSBC is delighted to have led the banking community to discuss the challenges and opportunities to improve cross-border payments and settlement. We look forward to continuing the positive dialogue created through this project to ensure that, as a collective community, we harness digital technology to deliver practical benefits for international businesses.”

Most recent episodes

Keeping the Plates Spinning: the Art of Treasury Project Management

Sandra Shen (Actualize Consulting) joins TMI's Tom Alford to offer professional insight into what defines successful treasury project management.  Our guest provides expert guidance on how to assign roles and leadership during project planning stages, considers the importance of mitigation...

18:27

Audio TMI - ESG: Time to Decide

The pressure to comply with ESG initiatives is being felt by corporates like never before, with ESG-compliance a common concern among treasury departments. TMI talks to Lavinia Bauerochse (Deutsche Bank) about treasury’s ...

11:41

UK Autumn Statement Restores Confidence in Sterling

Welcome to the latest edition of Liquidity Link Live, your exclusive market analysis provided by Northern Trust Asset Management, one of the world’s largest cash managers. Tune in each month to discover the very latest insights on the UK, Eurozone and US markets. This edition was recorded on the 7th...

05:16

Trade Finance Vision: J.P. Morgan and Cleareye Collaboration Plots Future Path

Eleanor Hill (TMI) is joined by Natasha Condon (J.P. Morgan Payments) to discuss the latest trends and innovations emerging from the trade finance arena. Natasha considers how treasurers can improve the efficiency of their working capital, and examines why it remains critical for banks and fintechs to...

29:01

Embedded Finance: A 101 Guide for Treasurers

Our latest TreasuryCast guest, Aman Narain (HSBC) sits down with TMI's Eleanor Hill to consider the ways in which treasury might be impacted by embedded finance. In this podcast, Aman explains the differences between embedded finance and BaaS, shares his hopes for the future in this space, and provides...

12:58

Audio TMI - A Modern, Agile, and Efficient Machine

UniCredit's Raphael Barisaac and Massimo Ortino explain how the fir...

What’s on the Horizon for Short-term Investments?

The treasury community has risen to the ongoing challenge of rising interest rates and inflation, with corporate cash serving as the sought-after safety net. Here, Daniel Farrell (Northern Trust Asset Management) and Karl Adams (ICD) consider how the latest MMF reform proposals affect short-term...

39:27

Transitioning a Corporate from LIBOR to CME Term SOFR

The loans market has predominantly moved to forward looking term rates, and both corporate borrowers and global lenders are increasingly turning to CME Term SOFR as the forward looking risk-free benchmarks to support their activities. Listen to this podcast, featuring Gavin Lee, Marco Bianchi (CME...

37:16

HSBC’s Sibos Spotlight – View from Sibos

TMI's Eleanor Hill invites Neil Atkinson, Nadine Lagarmitte, and Vinay Mendonca (HSBC) to discuss the critical treasury topics and conversations highlighted at this year's Sibos conference in Amsterdam. Amongst a wealth of market insights, our guests consider the most critical developments emerging from...

38:40