IMF unveils the development of a "new class" CBDC platform.
A novel blueprint for a cross-border payment system that leverages a single ledger for recording transactions involving central bank digital currencies (CBDC) has been proposed by the International Monetary Fund (IMF). Such a system will also enable improved information management and programmability.
The revelation was made on June 19th by IMF officials during a roundtable discussion on CBDC policy.
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This event, organized in partnership with Morocco's central bank, served as the platform where Tobias Adrian, the IMF's Director of the Monetary and Capital Markets Department, spoke about the potential advantages of the proposed system.
These advantages range from cost savings and expedited transactions for both individual and institutional users to better data on capital flows and more effective dispute resolution for central banks. As Adrian put it:
Some of the 45 billion dollars paid to remittance providers every year may then go back into the pockets of the poor.
Furthermore, the envisioned platform, named the XC (cross-border payment and contracting) platform, could be modified to support domestic wholesale and retail CBDCs.
On the same day as the roundtable, an IMF Fintech Note detailing the platform's design was released. Co-authored by Adrian, the note outlined how the XC operates:
XC platforms offer a trusted single ledger—a document representing property rights—on which standardized digital representations of central bank reserves in any currency can be exchanged.
The XC platform's design draws heavily from CBDC infrastructure and incorporates a settlement layer with a single ledger, with plans for increased accessibility.
The platform would also comprise a programming layer, providing the means for service innovation and customization, while an information layer would hold the requisite anti-money laundering (AML) details to meet trust conditions and privacy protections.
The IMF's visionary proposal of the XC platform offers an innovative solution to some of the long-standing challenges in cross-border payments, demonstrating the increasing role of technology in modern finance.
