Working Group on Cryptotechnology in International Payments
Background and context
Through a dedicated subgroup of the electronic Alternative Payment Working Group, the EBA has investigated practical implications, opportunities and challenges of cryptotechnologies in transaction banking. In this context, the EBA has already published two papers on the topic in order to foster a wider understanding of the technological and business related possibilities (use cases) of this technology:
- Cryptotechnologies, a major IT innovation and catalyst for change: 4 categories, 4 applications and 4 scenarios
- Applying cryptotechnologies to Trade Finance
The EBA came to the conclusion that currently asset centric technologies are potentially the most interesting category of cryptotechnologies for transaction banking and the payments domain, as they can operate in an integrated way with legacy IT, legal frameworks and existing assets.
In recent comments at EBAday and relevant business fora on the topic of cryptotechnologies, international payments were seen as another key area that could benefit from the adoption of cryptotechnologies. In international payments correspondent banks manage a multitude of bilateral relationships across multiple geographies in order to transfer funds safely between originators and beneficiaries on a global basis. In these business relationships the management of key requirements such as trust, security, operational and liquidity risks as well as post-transaction procedures are of utmost importance. The intent of the working group (WG) is to understand the utilisation of cryptotechnologies on business models in international banking and work on appropriate use cases.
Activities to be undertaken
In the second half of 2016, it is proposed that the group analyses the issues at stake in international payments and assesses how cryptotechnologies could be of benefit in this area. The deliverables to be produced will be primarily information papers.