As such, the adoption of the e-CNY may blunt the domestic and global success of WeChat and Alipay, which are the world’s most widely used consumer payment tools. China’s central bank has indicated that the primary focus of the e-CNY will be on the domestic mainland market. Switzerland, Hong Kong, Singapore, and many others localities are attempting to build the regulatory frameworks for creating the digital currency exchanges that represent the critical hubs for the future international monetary system.īut China’s push for the e-CNY may not immediately disrupt the existing international monetary system. While this is difficult to do, there are many efforts underway to make it happen. Scaling digital currencies across borders requires countries to coordinate on these type of interoperability issues as well as address complex cross-jurisdictional regulatory hurdles. Enabling clearing and settlement of digital currencies requires solving technical interoperability challenges as CBDCs and stablecoin networks are being implemented on a variety of blockchain or other IT systems that do not currently talk to each other. Currently, CBDC implementations are deployed on various blockchain and other IT systems which currently do not talk to each other. These hubs can enable clearing and settlement capabilities between bilateral trade pairs.
SWIFT SHARE GLOBAL PAYMENTS ALTERNATIVES HOW TO
The dominant incumbent now faces a hard choice: whether to adopt or fight against these disruptive technologies-and if adopting, how to do so effectively.ĬBDC “hubs” represent the next step in making digital currencies effective for international payments.Adoption by these large industry players and entrepreneurial fervor by the insurgents increases the disruption’s value to customers, making eventual mass scale adoption inevitable.central banks, China) adopt the same technologies both to protect their own business from these disruptors but also to gain market share from the dominant incumbent. faster transactions, lower costs, privacy, flexibility, “bank by device”), but face a “chasm” before mass scale adoption. blockchain) and experience rapid adoption due to a superior value proposition (e.g. digital currencies, stablecoins, decentralized payment networks) enter the market using new technologies (e.g.
SWIFT.gpi and FEDNow infrastructure upgrades) to meet customer needs. dollar) garners the lion’s share of industry profits and benefits, but only incrementally innovates (e.g.
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