#3: How Challenger FMIs are Revolutionizing Cross-border Payments

14 Jun

23rd June 2022

With:

| Dave Sissens (RTGS.global)

| Kazım Rıfat Ozyılmaz (Arf)

In Session #3, Dave Sissens (CEO, RTGS.global) and Kazım Rıfat Ozyılmaz (Co-Founder, Arf) join FNA to discuss the rise of Challenger FMIs. For decades, the correspondent banking model has forced banks to park billions in nostro accounts—capital that sits idle and "trapped" to facilitate slow, uncertain cross-border flows.

The discussion contrasts two revolutionary solutions to this liquidity problem. Dave Sissens details the RTGS.global model, which focuses on "synchronization"—settling transactions through the simultaneous updating of central bank ledgers, thereby removing the need for traditional messaging-based transfers. Kazım Rıfat Ozyılmaz presents Arf’s approach, which leverages stablecoins to provide instant, blockchain-based liquidity for licensed financial institutions. Together, they address the high-stakes journey of regulatory validation and the potential for these "challengers" to become the systemically important infrastructures of tomorrow.

The session covered:

The Liquidity Trap: Why the current "pre-funding" requirement for cross-border payments is the biggest barrier to efficiency and how challengers are "reclaiming" that capital.
Synchronization vs. Transfer: How RTGS.global’s model eliminates settlement risk by ensuring transactions only occur if both central bank ledgers update simultaneously.
Stablecoins in the Middle Office: Analyzing Arf’s use of stablecoins as a liquidity bridge to provide instant working capital for remittance providers and banks.
The Regulatory Gauntlet: Insights into the process of validating novel business models with skeptical financial authorities and the importance of a "compliance-first" mindset.
Risk & Resilience: Managing the transition to 24/7/365 settlement cycles and the operational safeguards required to handle systemic-scale volumes.
The Systemic Roadmap: Assessing whether these new infrastructures are destined to complement existing RTGS systems or eventually replace the core plumbing of global finance.

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