Global digital payments platform in testing phase
The International Bank for Payments has reportedly begun testing a telematic currency payments platform that could very soon lead to a global digital payments platform. The national banks that are behind the International Bank for Payments have long been showing their concern about the rise of cryptocurrencies and the problems they entail of volatility and also fraud. This initiative could revolutionize global payment systems. We are approaching the era of the obsolescence of money.
The initiative of the International Bank for Payments in the sense of starting tests with an international payment platform with digital currencies of central banks could mean the definitive burial of money. ©WorldSpectrum/Pixabay
Constant and sonant money is something we've grown up with and we take for granted. Having it in our hands or in our pocket gives us a certain feeling of power, for everything that we achieve thanks to money. As they say, money does not give happiness but it helps. Its genesis as a medium of exchange has some mystery and the question of equivalence is one of the great headaches for economic science.
Whether they were the old pesetas or the euros of today, money shines in our hands and is usually accompanied by images, symbols or powerful inscriptions. As the In God We Trust , the motto that appears on dollar bills. Later we got used to the "plastic money”, the debit and credit cards that became essential . The digital revolution came with the XXI century and Trustly, Apple Pay, Bizum and other systems flooded internet commerce .
In the midst of all this, someone came up with the idea of inventing a decentralized payment system in which digital money circulates through peer-to-peer networks using free open source software. Cryptocurrencies were born with bitcoin at the forefront. It was said about nerds at the beginning. Today, it is assumed that the national central banks a real headache .
Cryptocurrencies must return to the fold
When cryptocurrencies ceased to be a hobby of computer engineers and digital enthusiasts, they became a problem for central banks , which are responsible for regulating the country's monetary system. They are a problem because due to their expansion and increasing acceptance cryptocurrencies threaten international financial stability and, in addition, challenge the currencies that act as an international standard, case of the dollar and the euro.
Also known as the bank of banks, the International Bank for Settlements it is an international financial institution based in Basel, Switzerland and its ownership is shared by the vast majority of central banks around the world. It has representations in Hong Kong and Mexico City. Its functions include coordinating decision-making between central banks, serving as an economic and monetary research center and also as a trustee agent. The bank was founded in 1930.
The digital exchange system launched by the International Bank for Payments is named after The Dunbar Project . This has to examine the feasibility of digital currencies in order to propose in the near future an international digital payments platform that bears the imprint of central banks, threatened by the preponderance of decentralized cryptocurrencies.
The objective would be to develop a payment transfer system with digital currencies under the control of central banks, the so-called CBDCs (for its acronym in English) or Central Bank Digital Currencies . This would have been the conclusion of the joint report for the G20 of the International Bank for Settlements, the World Bank and the International Monetary Fund:
"Central bank digital currencies have the potential to improve the efficiency of cross-border payments, as long as countries work together. [...] Facilitating international payments through central banks' digital currencies can be achieved through varying degrees of integration and cooperation, ranging from basic compatibility with common rules to the establishment of international payment infrastructures.” – International Bank for Settlements , report Central banks' digital currencies for cross-border payments
It is clear from the joint report that the inevitability that central banks will end up issuing their own digital currencies , which is why a common international monetary policy is becoming more necessary than ever. Countries such as China, the United Kingdom, the United States or Japan would have already started conducting trials with digital currencies.
The The Dunbar Project it is carried out with the complicity of four central banks: Australia, Singapore, two industrialized economies, together with South Africa and Malaysia, two emerging countries. The results of the experiment will not be known until next year, but everything seems to indicate that this is how we will end up with money as we knew it until now . The emergence of cryptocurrencies has ended up forcing central banks to act.
The technical complexities in creating this global digital financial ecosystem they are huge, but those responsible for the initiative would have stressed that, unlike current cryptocurrencies that suffer from all the ills of speculation in financial assets, CBDCs are legitimized by the robust international financial system.
Iberpay, the initiative of the Spanish banking
Preparing for the more than possible issuance of a digital euro by the European Central Bank, the main Spanish financial institutions with the assistance of the Bank of New Zealand itself launched Iberpay at the time: a proof of concept of the sector for the enablement of digital payments with blockchain technology .
In its few years of life, the platform that currently functions as a domestic interbank technological infrastructure would have come to process more than 192 million transfers to the value of 55,000 million euros, supported as it is by practically all the Spanish financial institutions that make use of Iberpay services.
In June of this year the platform ended the smart Money Initiative whose objective is "to prepare the Spanish banking sector for the possible future issuance of a digital euro by the European Central Bank or a digital bank money” . Thuś it was published in the corresponding report that was released.
Technical aspects in the design of the digital euro, such as token-based models, with the risks involved of direct user management, DLT technologies (Distributed Ledger Technology) that allows operation as a non-centralized database, or the possibility of making offline payments no internet connection have been put to the test. The results are very positive, as is admitted from the platform.
From Iberpay it is suggested that a dual-layer financial infrastructure model it's the preferable one at the moment. According to this model, the central bank would issue the digital euros and the private financial system would take care of their distribution relying on the channels already created. This would facilitate the integration of the digital euro and this would allow for better risk management, as indicated.
