#12: CBDC Interoperability in Cross-border Payments

CBDC Broadcast

22 Nov

8th December 2022

With:

| Simon Chantry (Bitt)

| John Kiff (Satoshi Capital Advisors)

In this session, Simon Chantry (Co-founder & CIO, Bitt) and John Kiff (Satoshi Capital Advisors / formerly IMF) join FNA to explore the often-overlooked potential of rCBDCs as a solution for international retail transfers. As it stands, sending money across borders is a gauntlet of high fees, opaque exchange rates, and multi-day delays—inefficiencies that rCBDCs are uniquely positioned to solve.

Our guests discuss the "Clean Slate" advantage: the rare opportunity for central banks to agree on basic technological foundations and common message standards (like ISO 20022) before systems are fully deployed. We examine the competition from stablecoins and the legacy correspondent banking model, asking whether true global interoperability is a realistic goal or a geopolitical pipedream.

Key Discussion Points:

The Interoperability Catalyst: How rCBDCs can serve as a bridge between legacy systems and the future digital economy.
Crowding Out vs. Coexistence: Assessing whether a sovereign digital currency will stifle private-sector payment innovations or provide a stable foundation for them.
The "Local-First" Trap: Why designing CBDCs solely for domestic use could accidentally create new digital barriers in the global market.
Solving the FX Friction: How automated market makers and interoperable ledgers could settle foreign exchange transactions in real-time.
FMI Commerciality: Whether Financial Market Infrastructures will provide interoperability based on public good or purely commercial business models.

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