Instant Cross-Border Networks and the Reality of Real-Time Payments
Elon Musk and advocates of new technologies like blockchains, stablecoins, and central bank digital currency (CBDC) believe that these innovations will revolutionize cross-border payments and make them faster. However, the example of money transfer company Wise shows that the existing infrastructure already enables instant cross-border payments without the need for these technologies. Wise processes 55% of its customers’ cross-border payments instantly using the real-time retail payments systems built by central banks. These systems process incoming retail payments instantly on a first-come, first-serve basis, 24/7. Over 60 jurisdictions now have real-time retail systems in place. While there is still space for new entrants like Twitter, stablecoins, and blockchain-based offerings, they will need to integrate with the existing real-time infrastructure to differentiate themselves.
Key Points:
- Wise processes 55% of cross-border payments instantly using existing real-time retail payments systems.
- Real-time retail payments systems process payments instantly on a first-come, first-serve basis, 24/7.
- Over 60 jurisdictions have real-time retail systems in place.
- Existing infrastructure already enables instant cross-border payments without the need for new technologies.
- New entrants like Twitter, stablecoins, and blockchain-based offerings can integrate with the real-time infrastructure to differentiate themselves.
Hot Take:
The existing real-time retail payments systems built by central banks have already made instant cross-border payments possible. While new technologies like blockchains and stablecoins have their place, they need to integrate with the existing infrastructure to provide additional value. Elon Musk and other innovators should recognize the advancements that have been made and leverage the real-time systems to build their solutions. Let new payment options bloom on top of the central bank instant rails.
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