Cross Border Friction

Definition ∞ Cross border friction describes the impediments and inefficiencies encountered when conducting financial transactions or transferring assets across national boundaries. These obstacles include varying regulatory requirements, currency exchange complexities, high transaction fees, and delays in settlement. Such friction increases costs and reduces the speed of international financial operations. It presents a significant challenge for global commerce.
Context ∞ Reducing cross border friction is a primary objective for blockchain technology and digital assets, particularly stablecoins and central bank digital currencies. These innovations offer potential solutions for faster, cheaper, and more transparent international payments and remittances. Discussions frequently address how distributed ledger technology can streamline these processes and the regulatory adjustments needed to facilitate seamless global digital asset transfers. Future developments aim for a more interconnected and efficient global financial infrastructure.