Definition ∞ Interbank connectivity refers to the systems and networks that enable financial institutions to communicate and conduct transactions with each other. This infrastructure facilitates payments, settlements, and information exchange across the global banking system. In the context of digital assets, DLTs offer new possibilities for improving interbank connectivity, potentially streamlining cross-border payments and reducing settlement times. This modernization can enhance efficiency and lower operational costs.
Context ∞ The discussion around interbank connectivity frequently involves central banks and commercial banks exploring blockchain technology to upgrade existing payment rails. A key debate centers on the technical feasibility and regulatory challenges of integrating distributed ledger systems into traditional financial networks. Future developments include pilot programs for wholesale central bank digital currencies and tokenized interbank assets. These aim to create a more resilient and efficient global financial clearing system.
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