Cross-border payments: the IMF announces the design of a revolutionary platform

The International Monetary Fund (IMF) is planning a major revolution in the international payments landscape. The institution plans to set up a new cross-border payment platform, based on a single register. This innovation, compatible with wholesale and retail Central Bank Digital Currencies (CBDC), promises considerable benefits.

A platform meant to benefit both individual and institutional users

With the high demand for guidance on central bank digital currencies it has seen over the past two years, the IMF announced last April that it plans to release a CBDC handbook. A comprehensive document that should allow interested countries to improve the capacities of CBDCs in order to avoid possible digital divides.

This time, the institution plans to create a cross-border payment platform with a single register called the “XC platform”. This could in particular record transactions in central bank digital currency (CBDC). It was during a round table organized in collaboration with the central bank of Morocco on June 19 that IMF officials presented the outline of their project.

According to Tobias Adrian, Director of the IMF’s Monetary and Capital Markets Department, the platform could be very useful for individual and institutional users. He points out the benefits of such a platform, including faster transactions and lower fees. “Some of the $45 billion paid out annually to remittance providers could then go back into the pockets of the poor,” he said.

Tobias Adrian also co-wrote an IMF Fintech note that introduces the platform. “The XC platforms provide a single trusted ledger – a document representing property rights – on which standardized numerical representations of central bank reserves in any currency can be exchanged,” reads the memo published on same day.

The other advantages of the new platform

The XC platform should be easily accessible and could allow institutions to transact across borders without necessarily needing to have a reserve account with a central bank. It could facilitate scheduled payments and protect users’ personal information.

The IMF’s project to design an XC platform comes in a context marked by the rise of CBDCs. The institution is therefore doing well to consider the creation of a platform that can adapt to these digital currencies and that will facilitate cross-border payments.