The IMF plans to implement a “new class” of cross-border payment infrastructure based on a single ledger
Tokenized assets, like deposits, might be used in domestic operations on the XC platform, with or without CBDCs.
The IMF has outlined a “new class” of international payment system that employs a central bank digital currency (CBDC) single ledger to record transactions, programmability, and enhanced information management.
The IMF’s new platform idea was unveiled on June 19 during a roundtable on CBDC policy. Director of the IMF’s monetary and capital markets section Tobias Adrian stated during the ceremony hosted in partnership with the central bank of Morocco that the new platform might help individual and institutional users via cheaper costs and quicker transaction times. It was his words:
“If some of the $45 billion paid annually to remittance providers are redistributed to the needy, they will no longer be impoverished.”
According to Adrian, the platform would also enable central banks to mediate disputes, collect data on money movements, and intervene in the foreign currency market. He speculated that the system’s scalability would allow it to be used by domestic wholesale and retail CBDCs.
The XC platform followed the blueprint established by the CBDC. The settlement layer would use a unified ledger, and its participation would grow. The XC platform would enable the trade of tokenized domestic central bank reserves, eliminating the need for institutions to maintain reserve accounts with central banks to conduct cross-border transactions. Financial institutions’ reserve accounts would still be a source of liquidity.
A programming layer would allow for service customization and innovation, while an information layer would house the AML information required to fulfil trust criteria and privacy safeguards.
CBDCs would be unnecessary on the XC platform. The platform would allow for the interoperability of privately tokenized assets and currencies and “usefully instill standards and a safe environment in which to program financial contracts,” with settlements made in a fiat currency issued by central banks.
According to the article, Agustn Carstens, general manager of the Bank for International Settlements, presented a similar idea in a speech he gave in February.