JPMorgan Says CBDCs Will Save Billions in Cross Border Payments

• A report highlighting the benefits of stablecoin usage was published by consulting firm Oliver Wyman and JPMorgan today.

• The financial giants estimate that over $24 trillion in payments move across borders each year and that banks induce more than $120 billion in total transactional costs.

• The report uses the ASEAN region as an example for a potential use case of the tech, which comprises of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. This region alone contributes 7% of global cross border trade and utilizes 10 different currencies. A mutually agreed upon CBDC could be extremely productive in regards to reducing transaction fees and expediting trade processes.

• Jason Ekberg, a partner from Oliver Wyman, stated that “the case for CBDCs to address pain points in cross-border payments is very compelling. The bulk of today’s wholesale cross-border payments process remains sub-optimal due to multiple intermediaries between the sending and receiving banks, often resulting in high transaction costs, long settlement times, and lack of transparency on the status of the payments.”

• The discussion around stablecoins and central bank digital currencies (CBDCs) continue to intensify as financial markets set out to take advantage of the developing technology behind digital currencies.