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A Multi-Currency Exchange and Contracting Platform

Author

Listed:
  • Mr. Tobias Adrian
  • Federico Grinberg
  • Mr. Tommaso Mancini-Griffoli
  • Robert M. Townsend
  • Nicolas Zhang

Abstract

Cross-border payments can be slow, expensive, and risky. They are intermediated by counterparties in different jurisdictions which rely on costly trusted relationships to offset the lack of a common settlement asset as well as common rules and governance. In this paper, we present a vision for a multilateral platform that could improve cross-border payments, as well as related foreign exchange transactions, risk sharing, and more generally, financial contracting. The approach is to leverage technological innovations for public policy objectives. A common ledger, smart contracts, and encryption offer significant gains to market efficiency, completeness, and access, as well as to transparency, transaction and compliance costs, and safety. This paper is a first step aiming to stimulate further work in this space.

Suggested Citation

  • Mr. Tobias Adrian & Federico Grinberg & Mr. Tommaso Mancini-Griffoli & Robert M. Townsend & Nicolas Zhang, 2022. "A Multi-Currency Exchange and Contracting Platform," IMF Working Papers 2022/217, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2022/217
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    Cited by:

    1. Bank for International Settlements, 2023. "Central banking in the Americas: Lessons from two decades," BIS Papers, Bank for International Settlements, number 143.
    2. Tobias Adrian, 2023. "A cross-border payments, exchange and contracting platform for the 21st century," BIS Papers chapters, in: Bank for International Settlements (ed.), Central banking in the Americas: Lessons from two decades, volume 127, pages 175-181, Bank for International Settlements.

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