The U.S. Faster Payments Council (FPC), a membership organization devoted to advancing safe, easy-to-use faster payments in the United States, today published the second edition of the Cross-Border Payments Bulletin in its Faster Payments Knowledge Center.
The FPC Cross-Border Payments Work Group, sponsored by Wells Fargo, developed this latest industry bulletin to further explore the effect of Central Bank Digital Currencies (CBDCs) on cross-border faster payments.
The FPC Cross-Border Payments Work Group Bulletin.02 presents a simple cross-border correspondent banking payment flow model as a guidepost, discusses basic money movement flow to provide context into how cross-border funds move, and raises unanswered questions about money and information movement in the digital world.
“In order to improve cross-border payments, critical considerations and decisions are required to address the access methodology and how CBDCs will connect and interoperate across jurisdictions, but much depends on implementation choices made by various central banks and associated authorities,” said Barry Tooker, Principal at TransactionBanker.com and FPC Cross-Border Payments Work Group Chair. “In this the second in our series of bulletins, we propose a working model for an end-to-end cross-border payment leveraging one that has been published by the Bank for International Settlements and examines both the monetary and data flows.”
The series of bulletins is designed to educate the payments industry on the latest developments of CBDCs in the cross-border faster payments area. The first edition, Bulletin.01 released in October, served as an introduction to the topic with definitions of digital currency terms, drilled down into what CBDCs are, and gave examples of cross-border operating models. To appropriately analyze the effects of a CBDC on cross-border payments, Bulletin.02 provides a baseline of information tied to industry standards and discusses the impact of new technologies. Future bulletins will explore the open questions presented in this new bulletin and more in the context of the model presented.
The FPC prioritizes inclusion of diverse perspectives in tackling complex topics such as interoperability, identifying real-world solutions that can ease adoption of faster payments, managing security risks and fraud threats, addressing barriers to financial inclusion and cross-border payments, and more, as the organization paves the way toward a future of faster payments for all.