20230302-IMF-Trust_Bridges_and_Money_Flows_A_Digital_Marketplace_to_Improve_Cross-Border_Payments_38页_918kb

Trust Bridges and Money Flows: A Digital Marketplace for Improving Cross-Border Payments

This report explores the challenges of cross-border payments and proposes digital solutions to enhance efficiency. Cross-border payments are expensive, slow, and opaque due to trust issues among counterparties, such as limited bilateral credit relationships and high compliance costs. The report argues that tokenization of money can simplify trust networks, enabling a more efficient global marketplace for transferring funds. Key recommendations include leveraging central banks for improved liquidity and exploring a marketplace model that reduces reliance on traditional correspondent banking.

The trust-based credit model and pre-funding model often result in high costs and market concentration. A digital marketplace for tokenized money could lower risks and increase competition. Central banks can facilitate cross-border payments through swap lines, but a global clearinghouse or marketplace offers better efficiency. The study supports further research into practical implementations, emphasizing that digitization can reduce costs and improve transparency in international payments.

Key Findings:

• Cross-border payment challenges stem from trust limitations and information gaps.
• Tokenized money enables interoperable networks without bilateral links.
• A direct digital marketplace reduces costs and fosters global liquidity.
• Central banks can enhance trust but digital solutions are more promising for efficiency gains.