HomeBlockchainBank payments going global with stablecoins and CBDCs, Jan. 15–22

Bank payments going global with stablecoins and CBDCs, Jan. 15–22

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Bank payments going global with stablecoins and CBDCs, Jan. 15–22

Editor’s note

It may be too late for resolutions and too early for Lent, but lacking any discrete occasion, I would still like to give up United States political news for a while, or at least for the duration of one Law Decoded. 

Fortunately, in the spirit of going international and leaving the bonkers election cycle of the U.S., blockchain technology and stablecoins are playing a major role in the latest developments in cross-border payments and settlements. It’s long been one of the most talked-about applications of blockchain technology.

Diplomatic scheming shows up in payments by regular folks in the form of higher fees between countries in conflict. However, the issues of how money crosses borders through traditional alleys are so deeply ingrained as to be invisible to the average end user. This happens because while national payments systems have gotten streamlined with new technologies, they largely involve major commercial banks dependent on networks and systems set up by their respective central banks. Between central banks, many of these systems are stitched together clumsily.

The rise of stablecoins has inspired many major banks, otherwise turned off by the volatility of crypto assets, to reconsider these systems. JPM Coin may well be the most famous — until the central banks came along, of course.

This week has seen major news in stablecoins from commercial and central banks as well as the financial sinew connecting them. Unfortunately for the average user, these will remain the most permissioned of permissioned blockchains for the foreseeable future. Retail central bank digital currencies, however, are also moving forward.