Cross-border Financial News

Financial technology firm PayPal’s international money transfer service, Xoom, has announced a new product that lets users in the United States send money directly to Visa debit card users. 

Central bank digital currency (CBDC) development aims squarely at inclusion, both for the central bank in the national economy and for the people it serves. Meanwhile, the technology for cross-border payments is being developed elsewhere for the most part, according to a new report on the payments industry. 

The Lightning Network has struck Ghana, Kenya and Nigeria. During a conference in Ghana, Strike CEO Jack Mallers announced that the Bitcoin (BTC) payments company has partnered with the mobile app Bitnob to facilitate payments into Africa. 

Ukraine is continuing the work on its digital hryvnia, or e-hryvnia, despite the ongoing aggression by Russia.

East Asia could become the central bank digital currency world’s center of gravity – with major cross-border functionality advances on the cards in China and South Korea.

The new project, dubbed Mariana, explores automated market makers (AMM) for the cross-border exchange of hypothetical Swiss franc, euro and Singapore dollar wholesale CBDCs. With a primary focus on the ability to settle foreign exchange trades, the project involves the Eurosystem, Singapore and Switzerland BIS Innovation Hub Centres together with the Bank of France, Monetary Authority of Singapore and Swiss National Bank.

France, Singapore and Switzerland have launched a joint trial of their experimental central bank digital currencies (CBDCs) and decentralised finance (DeFi) protocols, in the first cross-regional test of its kind.

With a primary focus on the ability to settle foreign exchange trades, the project involves the Eurosystem, Singapore and Switzerland BIS Innovation Hub Centres together with the Bank of France, Monetary Authority of Singapore and Swiss National Bank. The aim is to deliver a proof of concept by mid-2023.Today, DeFi built on public blockchains uses smart contract protocols to automate markets for crypto and digital assets.

Source: FedotovAnatoly/Adobe

The experiment was designed to operate across different jurisdictions and currencies, to explore the capabilities of distributed ledger technology and the application of CBDC in cross-border payments between commercial banks. By enabling peer-to-peer and instant exchange of multiple CBDCs on a single network, Project mBridge aims to solve long-standing inefficiencies in cross-border payments and foster greater financial inclusion and innovation in international payments.Earlier experiments with a prototype application demonstrated a substantial improvement in cross-border transfer speed from multiple days to seconds.

In a keynote speech at Swift's Sibos conference, Menon offered his own thoughts on the challenge, exploring three possible ways to solve it: linking up faster payments systems; building a multi-CBDC common platform; and expanding private sector blockchain-based payment networks.Menon argues that the use of distributed ledgers for cross-border settlement need not be confined to CBDCs. Securely-backed stablecoins or tokenised bank deposits issued by private sector players can also be used to enable cheaper and faster cross-border payment and settlement.

In a statement released on Oct. 6, the European Union introduced another set of sanctions against Russia due to the prolonged and recently escalated conflict in Ukraine.

Despite Russia pushing the idea of using cryptocurrencies for cross-border payments, it still remains unclear what digital asset exactly the government plans to adopt for such transactions.

China has been testing its digital currency in major cities.

Russia’s Ministry of Finance and the Bank of Russia have agreed on a bill that will allow Russian citizens to engage in cross-border transactions using cryptocurrencies. 

The Bank of Russia and the country’s Ministry of Finance have reportedly reached an agreement allowing cross-border settlements in cryptocurrencies.

Russian Prime Minister Mikhail Mishustin on Tuesday officially instructed the government to come to a consensus regarding crypto regulation in Russia by Dec. 19, 2022.

Ending a long-term dispute, Russia’s Ministry of Finance has announced it has reached an understanding with the Bank of Russia, the country’s central bank, over the legalization of cross-border payments in cryptocurrencies.

Russian news agency TASS has reported that Aleksey Moiseev, the Deputy Minister of Finance, said in an interview that the Ministry of Finance and the Bank of Russia have agreed that in current conditions, “it is impossible to do without cross-border settlements in cryptocurrency.” In the near future, it may even be necessary to legalize cross-border settlements in these currencies, he claimed.

The Bank of Russia, the country’s central bank, has reportedly admitted that cross-border payments in crypto are inevitable in the current geopolitical conditions.

While domestic digital payment usage surged during the pandemic, the EIU expects this to slow over the next five years, largely owing to strong base effects. However, customers are increasingly demanding a similar revolution in cross-border payments, which are still mostly facilitated by the "old-fashioned" and "cumbersome" correspondent banking network. At the centre of this is Swift, which the paper notes has "encountered criticism for its relative inflexibility and lack of transparency" and seen a decline in the number of correspondent banking relationships over the last decade. More recently, Russian has been kicked off the Swift network, a move which could see the country and others such as China and India double down on their nascent Swift alternatives. Nevertheless, the paper says "setting up and scaling a full-fledged alternative bank-messaging system would be expensive and time consuming. It would also have limited real-world impact, given the prevalence of dollar-denominated cross-border flows. Swift will remain the dominant network, as long as countries and lenders come together to improve the Belgian network." Separately, cross-border payments will be disrupted by government-backed efforts to link systems. In Asia, moves are already underway to do this, allowing travellers across the region to purchase goods and services by scanning QR codes. As well as challenging Swift, disrupting cross-border payments will mean adopting emerging technologies, including blockchain, APIs and tokenisation, says the EIU.