Definition ∞ A wholesale payment system facilitates large-value transactions between financial institutions, such as banks, central banks, and other authorized entities. These systems handle high-volume, high-value interbank transfers, typically for settlement purposes. In the context of digital currencies, a wholesale payment system could leverage blockchain technology to enable more efficient and secure settlement of institutional-level digital asset transfers. It underpins the stability of the broader financial system.
Context ∞ The state of wholesale payment systems is currently undergoing modernization efforts globally, with central banks and financial institutions exploring digital asset and distributed ledger technologies. A key debate surrounds the potential for central bank digital currencies (CBDCs) to enhance or disrupt existing wholesale payment infrastructures. Critical future developments include the implementation of new digital wholesale payment systems that offer real-time gross settlement, reducing counterparty risk and improving liquidity management across financial markets.
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