- The system comes with lower fees and faster transactions
- It helps central banks aggregate capital flow, intervene in forex markets
The International Monetary Fund is introducing a new platform for cross-border payments that will use a single ledger to record central bank digital currency (CBDC) programmability and transactions and alleviate data management, Cointelegraph wrote.
Lower fees and faster transactions
IMF officials revealed the new system at a roundtable discussion on CBDC policy on June 19. Tobias Adrian, IMF director of the monetary and capital markets department, ensured the new system would benefit organizations and individuals alike through lower fees and faster transaction times. He said that users could get back “some of the $45 billion remittance providers receive every year.”
Platform can be adapted to retail and wholesale CBDCs
The platform can help central banks aggregate capital flow data, intervene in foreign exchange markets, and resolve disputes, according to Adrian. It can be adapted for domestic retail and wholesale CBDCs.
Based on CBDC infrastructure model
The system was dubbed “XC platform” (cross-border contracting and payment) and presented in an IMF Fintech Note, which Adrian co-authored and released on June 19. XC’s design is based on the CBDC infrastructure model. There is a single-ledger settlement layer, and access to it will become easier and wider with time.
At the moment, an institution can’t perform a cross-border transaction without having a reserve account with a central bank. The XC platform will let users trade tokenized domestic central bank reserves. Institutions with reserve accounts will still provide liquidity.
Programming and information layer in tandem
Services can be innovated and customized via a programming layer, while AML will be achieved through an information layer, ensuring compliance with trust and privacy conditions.
Settlements carried out in central bank funds
CBDCs won’t need to be used in the context of the XC platform, as XC will ensure asset and private-sector fund interoperability. As central bank money will be utilized for settlements, XC will “instill standards and a safe environment with which to program financial contracts.”
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