Wholesale central bank digital currencies could change cross-border payments

SEVEN years ago, central bank digital currencies (CBDCs) were interesting thought experiments without commercial applications. Then in 2016, the Bank of Canada launched Project Jasper, the first collaboration between a central bank and the private sector to examine the use of distributed ledger technology in wholesale payments.

Wholesale payments are not something most people think about. Yet they are the foundation of global trade and crying out for more efficiency – particularly if smaller firms and economies are to be fully included in the global economy. That’s why G20 set out a roadmap in 2020 to make cross-border payments faster, cheaper, and more transparent.

It won’t be simple. As the Bank for International Settlements points out, the challenges in cross-border payments are long-standing and complex.