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X-Border Payments: European Central Bank Report says CBDCs Could Be ‘Holy Grail’

PYMNTS | Aug 2, 2022

ECB Towards holy grail of cross border payments - X-Border Payments:  European Central Bank Report says CBDCs Could Be ‘Holy Grail’A central bank digital currency (CBDC) could be the “holy grail” for cross-border payments, offering a solution that is “immediate, cheap, universal in terms of reach, and settled in a secure settlement medium,” the European Central Bank (ECB) said in a recent report on identifying the ultimate cross-border payment medium.

“... the interlinking of domestic payment systems and the future interoperability of CBDCs are the most promising avenues,” according to the report, which also concluded that “... Bitcoin is least credible.”

The report points to the greater compatibility CBDCs have with forex exchange (FX) conversions, the upholding of monetary sovereignty, and easy instant payments via intermediaries such as central banks, the report indicated.

See: 

PBOC White Paper: e-CNY’s Path to Cross-Border Payments

Half of Multinational Firms Use Digital Currency for Cross-Border Payments (or Plan to)

Some central bankers from the G20, however, have hinted that digital currencies issued by the private sector may have more utility than those issued by central banks. Australian central bank Governor Philip Lowe said at a panel discussion that he’s in favor of a private sector solution over the central bank.

The promise of using CBDCs for cross-border payments depends on the progress made regarding anti-money laundering and counter-terrorist financing compliance measures to ensure straight-through-processing (STP) for the large majority of cross-border payments, according to the report.

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NCFA Jan 2018 resize - X-Border Payments:  European Central Bank Report says CBDCs Could Be ‘Holy Grail’The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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