A joint report by the CPMI, the BIS Innovation Hub, the IMF and the World Bank is considering the possibility of multilateral platforms for cross-border payments.
Multilateral platforms – cross-border payment systems that are multi-jurisdictional by design – could enhance cross-border payments by reducing the need for intermediaries and allowing payment service providers in different jurisdictions to transact directly with each other.
The report by the four organisations has been informed by a survey of central banks and through discussions with existing platform operators. It analyses the potential costs and benefits of multilateral platforms and how they might alleviate cross-border payments frictions.
Two paths for establishing multilateral platforms can be followed – the growth approach and the greenfield approach. The growth approach involves expanding existing multilateral platforms to additional jurisdictions, currencies and participants. The greenfield approach involves building a new, potentially global, infrastructure for cross-border payments.
The decision to establish a multilateral platform, and the approach to doing so, requires careful consideration of the associated benefits, challenges and risks. This report offers key insights for payment system operators and authorities contemplating the expansion or establishment of multilateral platforms.
Central banks in Israel, Norway and Sweden previously teamed with the Bank of International Settlements to explore how CBDCs can be exploited for international retail and remittance payments.
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