Central Banks Urge G20 to Back Cheaper Payments Plan
Central banks will ask world leaders to back a «roadmap» for cutting the cost of cross-border payments, the Bank for International Settlements said on Sunday.
The Bank for International Settlements (BIS) wants Group of Twenty (G20) leaders to rally behind the plan, as technological changes sweep through the domestic and cross-border payments sectors.
«Central banks have a core role in payment systems. The changes underway require them to step up and play a more significant part in improving the safety and efficiency of these systems,» said BIS General Manager Agustín Carstens.
Relooking The Wholesale Payment Networks
Facebook’s plans to launch its Libra cryptocurrency has forced central banks to re-examine their wholesale payment networks as well as changes in the retail sector.
The tech giant's planned expansion into retail payments has put a spotlight on the role of Big Tech in financial services, stirring debate over who will control money in the future. Hence, central banks must accelerate work to guarantee that new services run safely and efficiently, the BIS said in its quarterly review.
Critical For Emerging Economies
Cross-border payments, essential for some emerging economies due to remittances of their citizens working abroad, have been hampered by low speeds, high costs, and cumbersome processes.
The roadmap will look at current costs, sticking points and risks in payments and pinpoint how the private and public sectors can tackle them, the Basel-based BIS, an umbrella group for central banks, said.
Political will is needed to create conditions for cheaper cross-border payments that are properly regulated at a time when international «correspondent» banks are pulling out from aiding such payments for local lenders.
