Correspondent banking bypass refers to the direct transfer of funds between financial institutions without relying on a network of intermediary banks. This process often involves using distributed ledger technology or other direct payment rails. It aims to reduce transaction costs, accelerate settlement times, and enhance transparency in cross-border payments. Such systems seek to streamline traditional interbank relationships.
Context
Correspondent banking bypass is a significant topic in the transformation of global payment systems. Proponents argue it can make international transfers more efficient and less expensive. Opponents raise concerns about potential impacts on anti-money laundering oversight and financial stability. Future developments could see blockchain-based solutions increasingly adopted for direct interbank settlements, altering established financial networks.
This consortium-led initiative will tokenize G7 commercial bank money to establish a compliant, 24/7 settlement layer, driving significant capital efficiency.
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