The reserve banks of Canada, Singapore, and the United Kingdom propose using central bank digital currencies (CBDC) for cross-border payments.
The Monetary Authority of Singapore, the Bank of England and the Bank of Canada believe that CBDCs, which can be either retail CBDCs or wholesale W-CBDCs, have several advantages: 24-hour availability, anonymity, and elimination of risks for participants in a lending transaction.
In the report, the United Overseas Bank, HSBC, Toronto-Dominion Bank, and Oversea-Chinese Banking Corporation proposed three models of W-CBDC. The first W-CBDC model can be transferred and exchanged only within the country of origin, but not in other jurisdictions.
In the second model, the W-CBDC will be transferred and exchanged outside of domestic jurisdictions. According to this model, each central bank will have to offer support for multiple W-CBDC tokens.
The third model includes one universal W-CBDC, which is supported by multiple currencies and, thus, can be transferred and exchanged in all participating jurisdictions.
The report notes that the transition from using existing channels of correspondent banks to CBDC will help to overcome problems such as lack of availability, fragmented standards and the need for transactions through intermediaries.
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