Cross-Bank Payments

Definition ∞ Cross-bank payments refer to financial transfers conducted between accounts held at different banking institutions. These transactions typically involve multiple intermediaries, often resulting in slower processing times and higher fees compared to internal bank transfers. In the digital asset sphere, innovations like blockchain technology and stablecoins offer potential solutions for streamlining these operations. The efficiency and cost-effectiveness of cross-bank payments are critical for both retail and wholesale financial activities.
Context ∞ The state of cross-bank payments is experiencing significant transformation, driven by demands for faster and cheaper global transactions. A key debate centers on whether traditional correspondent banking networks can sufficiently modernize or if new digital infrastructures, including those powered by distributed ledger technology, will become dominant. Critical future developments involve international initiatives to establish real-time gross settlement systems and standardized digital payment rails.