A global payment system refers to the interconnected network of financial institutions, technologies, and rules that facilitate the transfer of funds across international borders. These systems enable individuals, businesses, and governments to send and receive money worldwide. They typically involve various intermediaries and clearing mechanisms. The goal is to provide reliable and efficient cross-border financial transfers.
Context
The modernization of the global payment system is a key objective for international financial organizations, with digital assets and blockchain technology often cited as potential catalysts. Discussions revolve around reducing settlement times, lowering transaction costs, and enhancing transparency. Central bank digital currencies are being explored as a means to improve the efficiency of these systems. The ongoing evolution seeks to address the inefficiencies inherent in legacy correspondent banking models.
DLT integration into core banking systems enables compliant, near-real-time settlement using commercial bank money, drastically reducing counterparty risk and operational friction.
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