Finance Breaking news Sibos 2020: What percentage of cross-border payments could be made in CBDCs? last financial news
Breaking-Finance.Com - Delegates discussing central bank digital currencies (CBDCs) at Sibos 2020 agree that there is a long road ahead for global mass adoption to facilitate cross-border payments.
Breaking-Finance.Com - Delegates discussing central bank digital currencies (CBDCs) at Sibos 2020 agree that there is a long road ahead for global mass adoption to facilitate cross-border payments. When asked what proportion of cross-border payments would be conducted using CBDCs in five years' time, the majority said less than 5%. Attendees to the session were however fairly bullish about the future for CBDCs, with 43% stating that they will see widespread adoption in the next five years. Another 43% said they would take off within ten years, while an extremely opttimistic 14% said they would do so within the next year. Asked about the relevance of CBDCs to their market, 57% of the attendees said they are absolutely relevant and 43% said they may be so. While CBDCs can certainly help to make international payments faster and cheaper, they cannot be seen as a "universal cure" to cross-border frictions, according to Frantz Teissèdre, head of interbank relations at Société Générale. "You still need to think about the limitations of FX and non-harmonised AML regulations, which would remain even when using CBDCs," he says.
The CEO of Fnality, Rhomaios Ram, believes the consortium exists and attracts shareholders due to concerns over central banks' ability to develop the infrastructure required to achieve mass adoption.
"CBDCs do not necessarily need to use blockchain, but if the central banks do go down that route, they will need the expertise of the private sector," Ram says.
Scott Hendry, senior director of financial technology at the Bank of Canada, agrees with this, saying the private and public sectors need to work together to find the optimal framework.
Hendry states that central banks have no interest in competing with commercial banks, nor carrying out any of the necessary functions relating to customer onboarding or meeting KYC/AML compliance.
The central banks primary concern would likely be to ensuring CBDCs are sufficiently accessible and user friendly to achieve mass adoption and address the decline of cash use.
"Canada doesn't have financial inclusion problem, but there some demographics who cannot access banking in remote communities and even some in cities," Hendry says.
"Our aim therefore is not really to achieve financial inclusion, but more to ensure there isn't financial exclusion."
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