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1、Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border PaymentsW H I T E P A P E RS E P T E M B E R 2 0 2 3ContentsImages:Getty Images,Unsplash 2023 World Economic Forum.All rights reserved.No part of this publication may be reproduced or transmitted in any form or by any means,i

2、ncluding photocopying and recording,or by any information storage and retrieval system.Disclaimer This document is published by the World Economic Forum as a contribution to a project,insight area or interaction.The findings,interpretations and conclusions expressed herein are a result of a collabor

3、ative process facilitated and endorsed by the World Economic Forum but whose results do not necessarily represent the views of the World Economic Forum,nor the entirety of its Members,Partners or other stakeholders.PrefaceExecutive summary1 Introduction2 Key regulatory frictions in cross-border paym

4、ents3 Factors driving key regulatory frictions4 Unlocking regulatory interoperability4.1 Make improving cross-border payment interoperability a key policy objective4.2 Strengthen regulatory cooperation for cross-border payments4.3 Modernize regulatory frameworks4.4 Encourage public-private partnersh

5、ips(PPPs)5 ConclusionContributorsEndnotes3459121314151820212224Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments2PrefaceCross-border payments have long been recognized as a significant barrier to international trade.In looking for solutions,emphasis has been placed

6、on improving payment technologies and driving technical interoperability by promoting the adoption of internationally recognized technical standards.Both the public and private sectors have deployed or are in the process of deploying the latest technologies and tools,including blockchain,artificial

7、intelligence(AI)and application programming interfaces,to improve cross-border payments.Such efforts reveal that advances in technology alone cannot solve all of the problems facing cross-border payments.Overcoming regulatory frictions to unlock interoperability is becoming increasingly crucial to e

8、nsure progress is made in building a cross-border payment system suitable for todays digital economy and trade.Policy-makers and industry experts alike are now coming to an agreement that regulatory frictions are a key obstacle to cross-border payments,and need to be addressed urgently.This publicat

9、ion,Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments,has been produced under the direction and with the support of the World Economic Forum Digital Payments for Trade and Commerce Advisory Committee.1 Important contributions and expert insights have come from the w

10、ider community a multistakeholder group covering a wide range of players in the ecosystem and representing economies with payment systems at different stages of development.This global multistakeholder process attempts to answer some critical questions in creating a coordinated regulatory approach t

11、owards cross-border payments:What are the main regulatory frictions in building cross-border payments for a more integrated global economy,for both banks and non-banks?What are the fundamental factors driving such regulatory frictions?How best to unlock regulatory interoperability for cross-border p

12、ayments?In evaluating the recommendations,what should the guiding principles be?The papers findings reinforce the urgent need for policy-makers to collaborate with industry and users to realize the benefits of innovation while addressing the risks involved.It is hoped that this paper will provide us

13、eful insights for policy-makers at both the domestic and international levels,and accelerate existing dialogues at the regional and international levels,set directions for future discussions among policy-makers and stakeholders,and foster multistakeholder collaborations to build a future-facing and

14、user-friendly cross-border payment system for the inclusive growth of digital economy and trade.Leslye Sihuay Diburga Master of Public Affairs,Goldman School of Public Policy,University of California,BerkeleyYan Xiao Project Lead,Digital Trade,World Economic ForumUnlocking Interoperability:Overcomin

15、g Regulatory Frictions in Cross-Border PaymentsSeptember 2023Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments3Executive summaryThe rise of cross-border payments2 because of increasing international trade and technology advances has outpaced the development of regul

16、atory frameworks suitable for global trade.Such discrepancy results in inefficiencies and barriers that hinder seamless and cost-effective transactions at a global scale.Acknowledging the importance of regulations in the development of cross-border payments,the Financial Stability Board(FSB)listed c

17、oordinating legal,regulatory and supervisory frameworks as one of the three priority themes of the G20 Roadmap for Enhancing Cross-Border Payments.Meanwhile,the World Economic Forum led a comprehensive multistakeholder collaboration involving experts from the payment industry,technology companies,re

18、gulators,international organizations and academia to gather valuable insights into the regulatory frictions facing cross-border payments and propose potential solutions to promote regulatory interoperability.3This white paper presents the challenges identified during this multistakeholder collaborat

19、ion,including disparities in regulatory frameworks across jurisdictions,complexities in anti-money laundering/combating the financing of terrorism(AML/CFT)compliance,stringent data privacy and security regulations,and regulatory barriers to accessing payment systems and infrastructure.Such challenge

20、s contribute to cost increases and impede transactions.To overcome these challenges and drive regulatory interoperability,the following actions are recommended via the multistakeholder process:Make improving cross-border payment interoperability a key objective:This recommendation aims to boost cros

21、s-border payment interoperability by establishing clear governmental directives with a global perspective,crafting a holistic national interoperability policy covering cross-border interoperability and conducting data-driven regulatory impact assessments.It emphasizes the need to resolve instances o

22、f regulatory fragmentation to promote interoperability and the competitiveness of markets,crucial for a globally interconnected economy.Strengthen regulatory cooperation for cross-border payments:This recommendation aims to improve cross-border payments by enhancing regulatory cooperation.Core strat

23、egies include strengthening international bodies for better alignment,fostering cross-border regulatory sandboxes for innovation and facilitating dialogue among various regulatory authorities to address cross-border payment complexities.Modernize regulatory frameworks:This recommendation advocates m

24、odernizing regulatory frameworks for cross-border payments by adopting a hybrid approach to regulation and removing regulatory hurdles to accessing domestic payment systems.The hybrid approach merges entity-and activity-based regulations for effective risk management and balanced competition.The aim

25、 is to optimize transactions,enhance competition and promote financial inclusion while addressing the potential risks.Encourage public-private partnerships(PPPs):This recommendation encourages greater collaboration between regulators and industry stakeholders,including payment service providers(PSPs

26、),technology companies and industry associations,to foster PPPs.By engaging in regular dialogues and cultivating a diverse multistakeholder community,the private sector,academia and civil society organizations can contribute valuable insights to shaping regulatory frameworks.These frameworks,in turn

27、,promote innovation,ensure adherence to regulations and improve the overall efficiency and security of cross-border payments.Improving regulatory interoperability can improve the efficiency of cross-border payments and promote financial inclusion by reducing overall costs while enhancing security an

28、d the robustness of the global payment system,as well as addressing the diverse needs of end users.By implementing the proposed strategies,regulators and industry stakeholders can bring about a more interconnected and efficient cross-border payment landscape.Regulatory interoperability is the founda

29、tion for building the overall interoperability of cross-border payments.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments4Introduction1The key to improving cross-border payments is to prioritize addressing regulatory frictions and recommend ways in which regulators

30、can facilitate regulatory interoperability.The value of cross-border payments is estimated to reach$250 trillion by 2027,representing an increase of more than$100 trillion in just 10 years.4 Factors driving such growth include:1)an increase in cross-border digital trade flows,such as e-commerce,vide

31、o streaming,games,apps and remote learning;2)the widespread adoption of digital payments driven by fintech and large technology companies with global footprints(often referred to as“bigtech”)that bring new and convenient services and broaden access to financial markets;and 3)the development of techn

32、ology that increases the efficiency of cross-border payments.The value of global e-commerce sales is projected to exceed$10 trillion by 2027,with cross-border transactions expected to make up at least 27%of that amount.5 Global exports of digitally delivered services reached$3.8 trillion in 2022,rep

33、resenting more than half of total global service exports.6 Cross-border trade of digitally delivered services has risen at an average annual rate of 8.1%since 2005,outpacing the growth rate of cross-border goods(5.6%)and other services exports(4.2%).7 Increased cross-border digital trade promotes th

34、e growth of cross-border payments and at the same time boosts the demand for faster,cheaper,more secure and more transparent payments,particularly for small-value transactions,which have increased in both volume and frequency in the past years.Cross-border digital trade also creates different use ca

35、ses that come with a variety of needs beyond cost,speed,access and transparency.8While trying to catch up with the demands of growing cross-border digital trade,the cross-border payments market has undergone a transformative shift,with the increasing participation of non-bank entities in the cross-b

36、order payments ecosystem.Such non-bank entities include fintech9 firms and bigtechs,such as Wise,Alibaba,Tencent,Google and Amazon.These innovative players have introduced groundbreaking approaches and increased competition in payment markets.The value of cross-border payments keeps growingFIGURE 1t

37、rillion$150trillion$250The international mobility of goods,services,capital and people coupled with the increased digitization of cross-border trade has increased the economic importance of cross-border payments.The Bank of England commissioned research by Boston Consulting Group that estimates the

38、value of cross-border payments in 2017 at$150 trillion and predicts that it will surpass$250 trillion by 2027.20172027Source:Bank of England,“Cross-Border Payments”:https:/www.bankofengland.co.uk/payment-and-settlement/cross-border-payments.Unlocking Interoperability:Overcoming Regulatory Frictions

39、in Cross-Border Payments5Growth of global exports of digitally delivered services in comparison to goods(Index 2005=100)FIGURE 24003002001000200520062007200820092010201120122013201420152016201720182019202020212022Digitally delivered services exportsGoods exportsOther services exportsSource:WTO,Globa

40、l Trade Outlook and Statistics,5 April 2023,p.15:https:/www.wto.org/english/res_e/booksp_e/trade_outlook23_e.pdf.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments6Demand for cross-border payments is growing fastFIGURE 3The cross-border ecommerce market is expected t

41、o represent around 22%($1.4 trillion)of total global ecommerce spend in 2022 and reach 27%($52.7 trillion)by 2027.In recent years,the emergence of cryptocurrencies promises to significantly reduce settlement times and costs for cross-border payments.The market cap for cryptocurrencies has reached$1

42、trillion,with an average daily transaction volume of$30 billion as of July 2023.10 At the same time,central banks are experimenting with various cross-border payment arrangements by developing their digital currencies or connecting existing fast payment systems.11 In addition to digital currencies,c

43、ompanies deploy artificial intelligence(AI)to improve efficiency in identifying patterns of criminal activities,screening of watchlists and optimizing cross-border payment routing.12While significant strides have been made in technology and operational efficiency,cross-border payments are still far

44、from ideal.Depending on the type of payment methods and currencies involved,cross-border payments can take several days to process and the cost can be high,with limited transparency in terms of timing and cost before settlement.13 While transactions are global in nature,regulations are still designe

45、d and enforced locally.The complex regulatory environment,characterized by high compliance costs and adherence to divergent regulations across jurisdictions,has led to prolonged processing times and increased costs for businesses and consumers.New entrants and technology also present challenges to r

46、egulators striving to address novel risks presented by new business models and innovation and level the playing field among payment players.Demand for seamless,cost-effective and safe cross-border payments is growing faster than regulators ability to establish a globally coordinated and interoperabl

47、e regulatory framework.For example,in Project Nexus14 and Project mBridge,15 two public sector-led cross-border payment experiments using the latest technology,the lack of an interoperability Source:Edgar,Dunn&Company,Future Fintech No Borders,Just Horizons:2021 Fintech Report,p.7:https:/ for seamle

48、ss,cost-effective and safe cross-border payments is growing faster than regulators ability to establish a globally coordinated and interoperable regulatory framework.Complex regulatory environmentHigh compliance costs and need to adhere to multiple regulationsDiverse needs of end usersSource:World E

49、conomic Forum.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments7regulatory framework is cited as a key obstacle for large-scale implementation in real life,which proves that technology alone cannot solve every problem facing cross-border payments.Project Dynamo,16 w

50、hich explored the use of stablecoins/digital tokens in trade finance,also highlighted that regulatory clarity and harmonization across jurisdictions(specifically the regulatory frameworks for stablecoins and utility tokens)are vital to facilitate the use of such tokens globally,as trade and payments

51、 are global by nature.Digitally delivered services exports,2022trillion3.82share of globalservices exports54%Source:WTO,Global Trade Outlook and Statistics,5 April 2023,p.15:https:/www.wto.org/english/res_e/booksp_e/trade_outlook23_e.pdf.Building upon the World Economic Forums ongoing work in drivin

52、g payment interoperability,this white paper prioritizes areas of regulatory friction and proposes recommendations for ways in which regulators can improve regulatory interoperability for cross-border payments.To produce this paper,the Forum used an interactive multistakeholder co-designing process i

53、nvolving surveys,in-depth interviews and collaborative workshops.The paper reflects insights from a diverse range of experts from the payment industry,including payment service providers(PSPs)(both banks and non-banks),17 regulators,international organizations and academia.Recommendations include ma

54、king efficiency and inclusion a key objective,strengthening regulatory cooperation,modernizing regulations and fostering public-private partnerships.Each recommendation is evaluated according to whether it could achieve the policy objectives of effectiveness,safety and equity for cross-border paymen

55、ts.It is hoped that the recommendations shed light on the process of driving regulatory interoperability for the future of more efficient cross-border payment systems.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments8Key regulatory frictions in cross-border payments

56、2Bank and non-bank PSPs experience shared areas of regulatory frictions in cross-border payments,but there are also sector-specific issues that need to be addressed.According to the survey conducted for this paper,the top three regulatory frictions for bank PSPs are:differences in regulatory and ove

57、rsight frameworks among jurisdictions;the complexities associated with complying with anti-money laundering/combating the financing of terrorism(AML/CFT)requirements in a cross-border setting;and the need to adhere to stringent data privacy and security regulations.For non-bank PSPs,the survey shows

58、 that the top three regulatory frictions are:regulatory barriers to accessing payment systems and infrastructure;compliance with AML/CFT requirements in a cross-border setting;and differences in regulatory and oversight frameworks across jurisdictions.Notably,the last two challenges are also prevale

59、nt among banks,underscoring their relevance and impact across the entire payment industry landscape.A visual representation of these key findings is illustrated in Figure 4.The four most significant regulatory frictions and challenges for banks and non-banks payment service providers FIGURE 4Source:

60、World Economic Forum.Limited access to payment systems and infrastructureData privacy and security regulationsCompliance with AML/CFTDifferences in regulatory and oversightframeworksBanksNon-banksUnlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments9 Differences in regu

61、latory and oversight frameworksInconsistent or unaligned legal,regulatory and supervisory frameworks can pose significant challenges and frictions in the cross-border payments landscape.18 Inconsistencies can arise in areas such as licensing requirements,consumer protection regulations,AML/CFT measu

62、res,data privacy laws and transaction monitoring standards.Inconsistencies are particularly pronounced among new entrants and innovative technologies where there is limited or no regulatory precedent to follow and risks to financial systems and customers are not yet apparent.Regulatory uncertainty d

63、eters responsible players from entering new markets.It also creates loopholes in managing market risks and creating regulatory arbitrage.19 Regulations concerning banks are usually clearer given the long history of regulation in this area.However,when banks venture into innovative areas,such as depl

64、oying payments using blockchain,they also seek clarity and consistency across jurisdictions to streamline internal compliance processes.Further,banks look for consistency in regulations covering similar activities so that they do not lose their competitive advantage in comparison to new entrants.The

65、 correlation between increased regulation and the divergence of such regulation is a concern underscored in a report by the Organisation for Economic Co-operation and Development(OECD)and the International Federation of Accountants(IFAC).20 The predicament is evident:the report reveals that in 75%of

66、 surveyed institutions,a considerable or highly significant impact on financial performance was observed due to regulatory divergence.Furthermore,71%of participants highlighted these developments as barriers to extending their business into new jurisdictions.Compliance with AML/CFT requirementsThe m

67、ultistakeholder survey conducted for this paper revealed that the current AML/CFT regime presents a conundrum for internationally active correspondent banks,which must comply with costly and often ineffective requirements or face legal and reputational risk under zero-tolerance enforcement.Experts h

68、ighlighted that the varying pace and level of implementation of Financial Action Task Force(FATF)guidelines create inconsistency around AML compliance requirements across jurisdictions,which results in confusion,frustration and inconsistencies.Moreover,the broad and principles-based nature of FATF g

69、uidelines allows for varying regulatory approaches and interpretations,leading to differences in requirements and compliance expectations.Due to such inconsistency and fear of significant financial loss and reputational damages because of non-compliance enforcement,compliance personnel tend to err o

70、n the side of caution,implementing rules more stringently than is legally required.Such an approach has led to a phenomenon known as“de-risking”,in which banks terminate or restrict correspondent relationships in certain geographies because the profits generated from those regions cannot cover the c

71、ompliance costs associated with operating businesses there.De-risking excludes certain populations,particularly those facing economic difficulties,from accessing cross-border payment services.A study conducted by LexisNexis on the cost of financial crime compliance found that financial institutions

72、faced a projected financial crime compliance cost of approximately$274 billion globally in 2022.21 The study also concluded that the average annual cost of financial crime compliance per organization has risen since the COVID-19 pandemic began.22 Increasing AML regulations,growing data privacy requi

73、rements and more complex investigations are among the top reasons identified for the rise in compliance cost.23 Institutions interviewed reported an increasing level of trade-based money-laundering schemes and financial crimes involving digital payments and cryptocurrencies.24 Data privacy and secur

74、ity regulations The interplay among data-related regulatory frameworks,encompassing data privacy,security and data localization requirements,has a significant impact on the daily operations of PSPs running cross-border transactions.Data collection and information sharing across borders are indispens

75、able for effective cross-border supervision,oversight and enhanced risk management for both regulators and cross-border PSPs.25 Data-related regulatory frameworks may run into conflicts with financial regulations,which can impede or even prohibit the sharing of crucial information.26 In particular,d

76、ata localization requirements may restrict the transfer of data required for processing cross-border transactions or conducting AML/CFT functions,leading to delays and increased costs for cross-border payments.PSPs must balance data protection,mandated by localization laws,with transparency and moni

77、toring,key to AML/CFT compliance.Evidence shows that regulatory heterogeneity around data governance has grown rapidly.27 Data from 2021 from the World Bank suggests that the average impact of data localization requirements amounts to approximately 6.4%of the transaction value,28 placing additional

78、burdens on PSPs and escalating the overall expense of cross-border transactions.29 Regulators face the daunting task of finding a balance between the imperative of efficient and cost-effective cross-border payments and the need for data sovereignty,privacy and security.Insufficient collaboration amo

79、ng financial regulatory and supervisory bodies as well as with data protection agencies can further intensify the tension among financial and data regulations.123Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments10 Regulatory barriers to accessing payment systems and

80、 infrastructure The multistakeholder process conducted for this paper revealed that non-bank PSPs encounter substantial regulatory challenges when attempting to access domestic payment systems.Legal and regulatory frameworks may create obstacles for non-bank PSPs to participate in national payment s

81、ystems in the following ways:1)regulations directly exclude non-bank PSPs from participating in the payment systems,such as the EU Settlement Finality Directive;2)regulations set out eligibility requirements that non-bank PSPs cannot meet(for example,legislation may require banking licences,not avai

82、lable to non-bank PSPs,as a prerequisite for participating in national networks);3)access is often limited to PSPs that hold financial services licences locally.Cross-border payment service providers will need to obtain financial services licences in many jurisdictions if they want to be connected t

83、o national payment systems.30 A survey conducted in 2021 by the Committee on Payments and Market Infrastructures(CPMI)of the Bank for International Settlements(BIS)revealed that only a limited number of payment systems permit direct access to entities beyond domestic banks.31 Direct participation in

84、 payment systems can significantly reduce the number of intermediaries involved in transactions,thereby lowering pre-funding costs for market participants without direct access.32 Facilitating increased access to payment systems can help create a more level playing field for both banks and non-bank

85、PSPs,encouraging innovation and competition in the industry.4Concept of a“safe payment corridor”to address the issue of de-risking BOX 1The World Bank and the International Monetary Fund(IMF)published A Draft Framework for Money Laundering/Terrorist Financing:Risk Assessment of a Remittance Corridor

86、 in September 2021.33 Despite the focus on remittance,the principles developed in the paper may also be applied to retail payments,which represent a lower risk than remittance because the payments are associated with a verifiable exchange of goods and services.The paper provides an actionable framew

87、ork to assess“safe payment corridors”.Regulators in payment corridors that are assessed to have low money-laundering/terrorist financing(ML/TF)risks can consider implementing simplified customer due diligence requirements and/or even exempt PSPs from certain AML/CFT requirements or providing relief

88、from ML/TF liabilities in low-risk scenarios.Such a framework,once implemented,may help reduce compliance costs for PSPs and revive correspondent banking relationships in developing or less-developed countries.Vigorous and continuous risk assessment requires capital investment in regulatory agencies

89、 to hire or train staff to carry out such work.Depending on how the framework is implemented,regulatory coordination between sending and receiving countries and between corridor countries and the rest of the world is required to ensure the financial integrity of the corridor.Further assessment needs

90、 to be conducted on the impact such a framework might have on the overall compliance costs for PSPs that operate globally.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments11Factors driving key regulatory frictions3Four clear factors result in regulatory frictions th

91、at are hampering progress in cross-border payments.Expert insights from the multistakeholder community have identified four key factors that contribute to the regulatory frictions and challenges in cross-border payments discussed earlier:Different levels of financial market development.One of the ke

92、y factors in cross-border payment regulatory frictions derives from financial markets in different jurisdictions being at different stages of development,which often correspond with countries differing levels of economic development.In recent years,many payment innovations resulted from emerging mar

93、kets that perhaps did not have robust financial regulatory systems.While lack of regulatory oversight may have promoted the fast growth of non-bank PSPs in certain markets,it can also create regulatory arbitrage and expose the financial market and consumers to systemic risks.Lack of a global regulat

94、ory perspective.Currently,there is a lack of global regulatory perspective when designing payment regulations,with regulatory frameworks focused primarily on domestic scenarios,despite the increasing interconnectedness of economies.This compounds the difficulties faced in cross-border transactions a

95、s rules often vary between originating and receiving countries.The absence of a global perspective in regulatory design creates complexity for compliance,hinders the expansion of innovative solutions for cross-border payments and limits the availability of payment services.Insufficient collaboration

96、 among regulators from different jurisdictions.Insufficient cross-border collaboration among regulators leads to a lack of consensus on how to manage ML/TF risks and frauds,as well as risks imposed by new entrants and innovations.Enabling cross-border collaborations is a significant challenge for re

97、gulators,potentially involving geopolitical or technical discussions that require careful consideration and the balancing of competing interests.Lack of public-private partnerships(PPP).A lack of PPPs hampers the ability to leverage industry expertise,technological advances and innovative approaches

98、 to address common challenges and regulatory frictions and drive interoperability.This lack impedes the collaborative initiatives needed to combat cross-border criminal activities,design appropriate regulatory approaches towards innovations and promote competition to provide better services to consu

99、mers.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments12Unlocking regulatory interoperability4As transactions and economies become increasingly interlinked,regulators must enhance cross-border payment interoperability to ensure trade competitiveness and economic gro

100、wth.To assess potential recommendations to address regulatory frictions identified through the multistakeholder process,the experts involved propose the criteria outlined in Table 1.Every country has its own unique culture,history,political and regulatory environment and a different level of economi

101、c and financial market development.It is important to consider those country-specific characteristics in promoting regulatory interoperability for cross-border payments.The multistakeholder survey conducted for this paper revealed the following four key recommendations to address regulatory friction

102、s and the factors driving those frictions identified earlier.Those recommendations also provide enough flexibility for country-specific laws and regulations.Criteria for evaluating recommendations to address regulatory frictions facing cross-border paymentsTABLE 1CriteriaIndicatorsEffectiveness Redu

103、ce regulatory complexity Improve cross-border payment interoperability Lower compliance costs Manage compliance risk Promote technical and network interoperabilitySafety Protect against illegal activity Manage risk in cross-border operationsEquity Facilitate financial inclusion for marginalized indi

104、viduals Promote innovation Reduce barriers for new entrantsSource:World Economic Forum.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments13Historically,domestic financial stability and market integrity have been top priorities for financial regulators,taking preceden

105、ce over cross-border payment interoperability.In a world where transactions and economies are becoming increasingly interlinked,enhancing cross-border payment interoperability is becoming more and more important for regulators to ensure competitiveness in trade and economic growth.The G20 is paving

106、the way for this transition by identifying that enhancing cross-border payments is a key policy priority,demonstrating the urgent need for regulatory reform and improvement.A holistic national policy that considers cross-border payment interoperability is needed as an integral part of a countrys pay

107、ments policy agenda.Achieving this requires the development and promotion of several key strategies:Include enhancing cross-border payments in regulatory mandates:It is regulators responsibility to provide explicit mandates that underscore the criticality of cross-border payment interoperability.The

108、se directives should aim to foster transparency(while protecting proprietary information),seek to improve transaction efficiency and promote competition(while managing risks and addressing other user needs).Setting clear mandates incorporating cross-border payment interoperability as a key objective

109、 is the first step towards creating a more interoperable global payment system.Establish a holistic national interoperability policy:Achieving payment interoperability necessitates a synergistic effort encompassing multiple agencies,the public and private sectors and international standard-setting b

110、odies.To effectively respond to this complex challenge,a country must champion the formulation of a broad-based interoperability policy.Such policy,built on insights from relevant stakeholders,should articulate clear,measurable objectives.This encourages continuous evaluation and adaptation,ensuring

111、 that the policy remains responsive to the evolving landscape of cross-border payments.Promote regulatory impact assessments on cross-border payments:Regulatory impact evaluations are crucial when crafting novel regulations or implementing substantial amendments to current ones.These evaluations sho

112、uld scrutinize the potential repercussions of domestic regulations on cross-border transactions,the consistency of regulations in comparison with their major trading counterparts,the competitiveness of markets and the overall efficacy of cross-border payment systems,with qualitative and quantitative

113、 measurements.Such thorough analyses would facilitate the detection of potential hindrances to interoperability,thereby guiding the formation of more effective,streamlined and harmonized regulatory frameworks.Defining and Measuring Payment Interoperability,a white paper published by the World Econom

114、ic Forum,provides some initial thoughts and structure regarding how to set such impact assessments.34Table 2 briefly analyses how this recommendation will affect the efficiency,safety and equity of cross-border payments.Make improving cross-border payment interoperability a key policy objective4.1Po

115、tential impacts of making cross-border payment interoperability a key policy objectiveTABLE 2EffectivenessThe proposals emphasis on clear mandates and regular regulatory impact assessments could lay out clear guiding principles and objectives for regulators designing regulatory frameworks that affec

116、t cross-border payments.This helps to clarify the compliance landscape.The proposal advocates a national policy that elevates regulatory interoperability.This strategy will also encourage technical and network interoperability,optimizing the collaboration of systems,technologies and networks across

117、jurisdictions.The result is a simpler,faster cross-border transaction process,leading to enhanced efficiency.SafetySafety in cross-border payments could be bolstered through this proposal by setting up regulatory impact assessments with clear qualitative and quantitative criteria.Regulatory impact a

118、ssessments can aid in identifying potential vulnerabilities,allowing for proactive measures.Driving regulatory interoperability can also mitigate regulatory arbitrage,reducing fraud risks and enhancing the security of the global financial system.EquityThe inclusion aspect of the proposal directly co

119、ntributes to equity in cross-border payments.The emphasis on inclusivity in mandates and the interoperability policy aims to extend the benefits of efficient,safe cross-border transactions to a broader population.This could help reduce the financial divide,giving underrepresented or marginalized pop

120、ulations better access to cross-border payments.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments14Regulators have taken diverse approaches to driving regulatory cooperation for cross-border payments:entering into bilateral and multilateral agreements;signing memora

121、nda of understanding;or engaging with regional or international organizations.Cooperation helps drive consistent standards across jurisdictions,reduces barriers to innovation adoption and market entry and improves oversight coordination for cross-border payments.Several regional,international and in

122、tergovernmental organizations have been working to drive regulatory interoperability for cross-border payments.At the regional level,the European Union sets the best example in terms of building regulatory interoperability for cross-border payments:harmonized laws and regulations,harmonized implemen

123、tation of laws and regulations,and harmonized enforcement to pave the way for the setting up of the Single Euro Payments Area(SEPA).35 At the global level,the United Nations Commission of International Trade Law(UNCITRAL)published the Model Law on International Credit Transfers in 1992 in response t

124、o the need to bridge legal gaps that resulted from major changes in the means by which cross-border payments were made.36 Under the leadership of the G20,the Financial Stability Board,the IMF,the World Bank,the CPMI,the BIS Innovation Hub and FATF are joining forces to enhance cross-border payments.

125、Improving the consistency of bank and non-bank regulation and supervision,enhancing information for end users and updating the application of AML/CFT rules have been identified as priority themes on legal,regulatory and supervisory frameworks,37 consistent with the gaps identified through the multis

126、takeholder process.To promote interoperability at a global level,it is important to continue consulting countries beyond the G20 and to encourage them to consider recommendations resulting from the implementation of the G20s roadmap.With fast-moving innovation in the payments space and varying level

127、s of financial market development in different countries,all jurisdictions should strengthen their regulatory coordination with one another,actively participate in global regulatory coordination efforts and engage with regional and international organizations to promote cooperation,information shari

128、ng and alignment of regulatory approaches.Strengthening regulatory cooperation for cross-border payments requires developing various policies,including:Strengthen existing regional and international organizations for regulatory coordination and alignment at the global level:Regional and internationa

129、l organizations play a vital role in promoting regulatory interoperability.More support should be given to regional and international organizations to help facilitate regular communication and collaborations among regulators across agencies in different countries to bridge regulatory gaps,align regu

130、latory approaches to reduce regulatory arbitrage and share best practices.Implementing agile governance to promote innovation requires financial support to train existing personnel and attract new talent.More investments are required within regional and international organizations to organize techni

131、cal assistance and capacity-building programmes to help regulators understand emerging technologies and their implications and implement regulation technologies and methodologies.Strengthen regulatory cooperation for cross-border payments4.2Unlocking regulatory interoperabilityFIGURE 5Make improving

132、 cross-borderpayment interoperabilitya key policy objectiveStrengthen regulatorycooperation for cross-borderpaymentsModernize regulatoryframeworksEncourage public-privatepartnerships(PPPs)Source:World Economic Forum.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments1

133、5 Encourage regulatory sandboxes or innovation hubs for cross-border payments:Regulatory sandboxes are increasingly being used to create a controlled environment in which regulators,businesses and innovators can collaborate,test new technologies and business models and assess their regulatory implic

134、ations.Studies show that these sandboxes create regulatory certainty,help innovators attract capital and reduce compliance costs.38 In 2022,the Reserve Bank of Indias sandbox on cross-border payments resulted in four fintechs being approved following completion of the test phase.39 Pacific Island co

135、untries are in the process of setting up a Pacific Regional Regulatory Sandbox,with the goal of addressing friction in dealing with fintech regulations.40 Nevertheless,regulatory sandboxes focusing on cross-border payments and cross-border regulatory cooperation remain limited in number;for cross-bo

136、rder innovations to deliver their benefits and regulators to find a consistent approach to innovation,more cross-border collaboration on regulatory sandboxes or innovation hubs is needed.Enhance cross-border regulatory cooperation and coordination:Greater cooperation and coordination are needed to a

137、ddress regulatory frictions in cross-border payments.In addition to regular dialogues,this cooperation and coordination may take many forms,such as entering into digital economy agreements to commit to global standards and interoperability or entering into fintech cooperation agreements.41 They can

138、also take the form of information sharing on AML/CFT and fraud,mutual recognition of laws and regulations in areas such as data privacy,licensing,sandbox approvals and eligibility to participate in payment systems,or developing a single rule book for cross-border payments.42 Encouraging cooperation

139、and facilitating information exchange promotes a comprehensive understanding of diverse regulatory frameworks.This,in turn,drives dialogue and stimulates the development of shared strategies to address the complexities of cross-border payment challenges.Table 3 briefly analyses how this recommendati

140、on will affect the efficiency,safety and equity of cross-border payments.Potential impacts of strengthening regulatory cooperationTABLE 3EffectivenessPromoting global regulatory coordination aligns approaches and streamlines regulatory frameworks,reducing unnecessary complexities and facilitating sm

141、oother cross-border transactions.Regulatory sandboxes and innovation hubs for cross-border payments foster collaboration,test innovative technologies and implement regulatory assessment,leading to the adoption of efficient and effective payment solutions.SafetyPutting capacity-building programmes in

142、to action means investing in training and sharing knowledge.This helps regulators better understand global rules and new risks,enabling them to manage risks effectively while promoting innovation.Encouraging regulatory collaboration can enhance risk management,oversight and compliance with data priv

143、acy rules,security regulations and AML/CFT requirements.Coordinated efforts and shared insights deliver a stronger approach to counter financial crimes,safeguard consumer data and secure cross-border transactions.EquityBy promoting global regulatory coordination,barriers and inconsistencies in regul

144、atory requirements can be minimized,creating a level playing field for market participants,including non-bank payment providers and underbaked populations.The proposal encourages innovation,knowledge sharing and experimentation,leading to the development of diverse and accessible payment solutions t

145、hat cater to the needs of individuals and businesses worldwide.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments16A Set of UNCITRAL model laws that form foundations for cross-border payments BOX 2In delivering on its mandate to promote harmonization and modernizatio

146、n of international trade law,UNCITRAL issued model laws that establish foundations for international trade and cross-border payments.As well as the Model Law on International Credit Transfers(1992),which is directly relevant to cross-border payments,model laws on electronic signatures(2001),electron

147、ic transferable records(2017)and the use and cross-border recognition of identity management and trust services(2022)all contribute to the development of international legal norms that affect the execution of cross-border transactions.Building a holistic national policy for cross-border payment inte

148、roperability FIGURE 6Source:World Economic Forum.Promote regulatory impact assessments on cross-border paymentsInclude enhancing cross-border payments in regulatory mandatesEmphasize criticality;foster transparency and efciencyCollaborate across sectors;adapt and evolveEvaluate repercussions;harmoni

149、ze frameworks on cross-border paymentsCrossBorderPaymentsEstablish a holistic national interoperability policyUnlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments17In a rapidly digitalizing world,regulatory frameworks must evolve to keep pace with the ever-changing fin

150、ancial services landscape.The participation of bigtech and fintech in cross-border payments and the introduction of new technologies promote financial inclusion and bring better services to consumers.However,they also complicate the regulatory landscape by introducing potential new risks,particularl

151、y concerning AML/CFT,consumer protection and market competition.Crafting a well-balanced strategy that ensures fair competition and reduces the risks to both the financial system and consumers poses a significant challenge for regulators within the current financial landscape.Adopt a hybrid model co

152、mbining entity-based and activity-based approaches:Principles of“same activity,same risk,same regulation”and proportionality(the level of regulation in proportion to the systemic risks an entity or activity presents)are two important agile governance concepts in formulating regulations.Those two pri

153、nciples power a recommendation for an activity-based approach in regulating non-bank PSPs,i.e.regulating entities based on the exact activities they carry out.The activity-based approach levels the playing field by subjecting all entities to the same regulation when their activities pose the same ri

154、sks.However,the activity-based approach requires a very clear definition of activities and close coordination across countries regarding the definition and enforcement failure to do so could create regulatory arbitrage in a cross-border setting.46 As the cross-border payments volume processed throug

155、h non-bank PSPs continues to rise,closing regulatory gaps and reducing arbitrage opportunities in non-bank regulations become important tasks in order to preempt systemic risks at a global level.This is why improving consistency of bank and non-bank regulation and supervision becomes a priority acti

156、on as part of the FSBs priority actions for achieving the G20 targets.47 The IMF recommended a hybrid approach,offering a balance between activity-and traditional entity-based approaches.48 It involves conducting a close study of economic functions and activities to identify and monitor risks and mo

157、ve from an activity-based approach to an entity-based approach when the operations of a company become capable of creating systemic risks to the market.49 Markets in Crypto-Assets Regulation(MiCA)is a good example of an attempt to strike such a balance by applying a more activity-based approach to s

158、maller issuers and a more entity-based approach to market-significant issuers.50 Modernize regulatory frameworks4.3Regulatory governance design for a multilateral platform for cross-border paymentsBOX 3Multilateral platforms for cross-border payments are more common and better known than may be real

159、ized.Visa and Mastercard have been in existence for years,with many entities participating in their networks across several jurisdictions.There are also several wholesale and retail multilateral platforms run by regional intergovernmental organizations.43 Varying legal protection for important conce

160、pts such as settlement finality,additional regulatory requirements on foreign operators,market entry barriers such as controls on foreign direct investments and data localization requirements are all legal barriers to the successful operation of a multilateral platform.44 Despite the regulatory chal

161、lenges those platforms face,their governance models can set examples of regulatory coordination for a global-level multilateral platform for cross-border payments.Project Nexus run by the BIS Innovation Hub Singapore Centre experiments with building a global-scale project that links existing fast pa

162、yment systems from multiple jurisdictions using APIs in a hub-and-spoke manner.45 Its proposal includes a Nexus Scheme Organization(NSO)with decisions about the scheme made by the NSO board and payment network operators(usually central banks)and other relevant supervisory bodies form a joint oversig

163、ht forum to ensure that the operation of the network does not pose financial risks and to coordinate regulatory divergence.Project Nexus revealed that inconsistent or conflicting regulatory requirements are among the key challenges encountered when operating such a network.As its next step,the team

164、will conduct further work to map out any incompatibilities between regulatory regimes and explore how Nexus can accommodate all of these differences.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments18 Remove regulatory barriers to accessing domestic payment systems:

165、Improving access to domestic payment systems can greatly optimize cross-border transactions,particularly when countries are starting to connect their fast payment systems.A more accessible system allows non-bank PSPs to compete effectively,reduces intermediaries and lowers costs for consumers,thereb

166、y promoting financial inclusion and competition.Broadening non-bank PSPs access to domestic payment systems requires regulators to reevaluate any of their eligibility requirements that could potentially block non-bank PSPs from participating in payment networks,including licensing requirements and a

167、ccess to central bank settlement accounts.51 While there are many benefits associated with widening access,the process also introduces risks to the payment systems,such as counterparty credit risks,operational risks and stability risks.It is crucial for regulators to conduct risk assessments in rese

168、tting eligibility requirements.Table 4 briefly analyses how this recommendation will affect the efficiency,safety and equity of cross-border payments.Potential impacts of modernizing regulatory frameworksTABLE 4EffectivenessThis recommendation promotes reduced compliance costs by aligning regulation

169、s with specific activities,not licensed entities,easing PSPs burden,particularly when fintech or bigtech entities do not have systemic impact.Broadening access to domestic payment systems allows PSPs to bypass various intermediaries,simplifying compliance and cutting costs.Moreover,this recommendati

170、on promotes common standards and technology adoption by expanding PSPs access to payment systems,enhancing technical interoperability.SafetyConsistent rules and security controls minimize fraud,but an activity-focused approach in cross-border payments can heighten security risks in areas such as dat

171、a governance,operational resilience and other risks,necessitating a balanced,hybrid regulatory strategy.A hybrid regulatory approach,combining entity-based and activity-based regulation,enhances security in cross-border payments by providing comprehensive and adaptable oversight,minimizing regulator

172、y arbitrage and offering clear guidelines for innovation,thus reducing system vulnerabilities.EquityCompetition promotes innovation.New players can bring novel ideas and solutions,driving improvements in services and technology.By broadening eligibility criteria,this recommendation may reduce barrie

173、rs for entry,promoting a more competitive and diverse market.This can lead to better pricing and services for end users,improving financial inclusion.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments19Potential impacts of encouraging public-private partnershipsTABLE

174、 5EffectivenessThe recommendation encourages streamlined compliance by sharing resources,expertise and technologies;reducing costs;and promoting effective risk management.It fosters collaboration on technical standards,protocols and infrastructure,enhancing technical interoperability and the integra

175、tion of payment systems.SafetyPPP can play a crucial role in managing risks in cross-border operations.By combining the expertise and resources of both sectors,partnerships can enhance risk management frameworks,develop robust security measures and facilitate information sharing to address potential

176、 threats and vulnerabilities.This collaborative approach contributes to the safety and resilience of cross-border payment systems.EquityEffective PPP has the potential to increase innovation and reduce barriers to entry for new competitors.By encouraging collaboration,knowledge exchange and access t

177、o resources,partnerships can stimulate innovation in payment services and technologies.This leads to a more dynamic and competitive market environment,providing consumers with a wider range of options and promoting fair competition among participants.The payment industry plays an important role in p

178、romoting trade and commerce and forms the foundation of a healthy economy.The public infrastructure nature of payments presents a unique opportunity for the public and private sectors to work together to produce agreement on their respective roles as the technologies evolve.To ensure that cross-bord

179、er payments are secure,efficient and accessible,regulators should work with the private sector to understand the latest technologies and their regulatory implications.Public and private collaborations can lead to more informed and effective regulatory decisions as well as the development of interope

180、rable solutions and frameworks with shared resources.They can also result in a safer global financial market thanks to a greater ability to detect crimes through improvements in information exchange.Committing to a joint public-and private-sector vision to improve cross-border payments is one of the

181、 focus areas of the G20 Roadmap for Enhancing Cross-Border Payments.As part of the actions to encourage PPPs to follow the G20 Roadmap,the FSB is collaborating with the CPMI to convene an annual payments summit with senior industry representatives and industry taskforces to encourage the public sect

182、or to conduct outreach with market participants,such as regular workshops to update them on progress and exchange experiences.52 Building an effective PPP requires regulators to involve a diverse base of industry participants that represent different payment methods and carry out different functions

183、 in the cross-border payments value chain,fostering trust and transparency and promoting interactive and candid communications.Table 5 briefly analyses how this recommendation will affect the efficiency,safety and equity of cross-border payments.Encourage public-private partnerships(PPPS)4.4Unlockin

184、g Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments20Conclusion5Enhanced regulatory interoperability is crucial for efficient and safe cross-border payments,as demand for such payments is expanding rapidly,outpacing regulators ability to establish suitable regulatory framewor

185、ks.The process of developing this white paper involved a diverse range of jurisdictions with financial markets at different levels of development,a broad base of PSPs ranging from international banks to small start-ups and a wide variety of technology providers.The process from identifying key obsta

186、cles to proposing solutions through a range of tools deployed to build trust that would lead to effective communications was an example of effective public-private collaboration.Key recommendations developed in the process include:amplifying cross-border payment interoperability as part of the prima

187、ry objectives;reinforcing global regulatory cooperation;modernizing regulations through a hybrid approach that combines entity-and activity-based processes and enhanced access to payment systems for PSPs;and promoting public-private partnerships to construct a robust ecosystem for cross-border payme

188、nts.Policy advocacy for regulatory interoperability can alleviate regulatory frictions identified,creating a pathway for cross-border payments that responds to the diverse needs of end users.However,the recommendations included need to be adopted in accordance with individual jurisdictions unique ci

189、rcumstances and objectives,with a shared aim of nurturing responsible innovation and promoting competition while managing risks.Enhancing cross-border payment systems unlocks many opportunities for businesses and individuals,encouraging financial inclusion and positively affecting the global economy

190、.Regulators and the private sector,with the support of international bodies,can help create a world in which payments flow smoothly across borders and regulations inspire confidence and trust,with progress celebrated as a collective triumph.Unlocking Interoperability:Overcoming Regulatory Frictions

191、in Cross-Border Payments21ContributorsAcknowledgementsLead Authors Leslye Sihuay DiburgaMaster of Public Affairs,Goldman School of Public Policy,University of California,Berkeley Yan XiaoProject Lead,Digital Trade,World Economic ForumWorld Economic Forum Mario CanalesProject Specialist,Digital Trade

192、,World Economic Forum Sean DohertyHead,International Trade and Investment,World Economic Forum Injy ElhabroukProject Specialist,Digital Trade,World Economic ForumSimon Lacey Head,Digital Trade,World Economic Forum Jayson ShanProject Specialist,Digital Trade,World Economic ForumContributors and Revie

193、wers Pablo Garca ArabhtyCo-Founder and Chief Executive Officer,Cucuru Hemant BaijalSenior Payment Systems Specialist,World BankPedro BarreiroBrazil Banking and Expansion Lead,Wise Jess Lozano BelioDigital Regulation Senior Manager,BBVARichard BerkhoutDeputy Division Chief,Financial Integrity Divisio

194、n,International Monetary FundDave BrodskySenior Director,Global Policy Cross-Border Payments,Visa Hector CardenasLecturer,Goldman School of Public Policy,University of California,Berkeley Jess ChengPartner,Wilson Sonsini Goodrich&RosatiEvis DaumChief Counsel,Federal Reserve Financial ServicesSaskia

195、DevolderManaging Director for Strategy,Cross-Border Payments,Swift Miguel Diaz Diaz Head,Toronto Center,Bank for International Settlements(BIS)Innovation HubVictoria L.EdisonChief Compliance Officer,ChimeZiyang FanHead of International Government Relations Policy,PayPalIku FujimatsuVice-President,Cr

196、oss-Border Policy and Strategic Initiatives,VisaThis white paper is the product of many interviews,survey responses,workshops and research activities.The views expressed may not directly reflect the perspectives of all participating individuals or organizations,nor those of their institutions.Thanks

197、 are due to everyone who lent their expertise through surveys,interviews and workshops,including those not specifically acknowledged.Unlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments22Yksel GrmezExecutive Director,Central Bank of Trkiye Anneke KosseSenior Economist,

198、Bank for International Settlements Committee on Payments and Market Infrastructures(CPMI)Alicia KrebsVice-President,Regulatory Advocacy,Mastercard Kingsley Lam Head of Americas and Europe,Global Payments,ByteDance Gordon LiaoChief Economist,Circle Bruno MagraniPresident,ZettaAlejandro MedinaDeputy S

199、uperintendent of Risk,Peruvian Financial AuthorityMara Antonieta PazIn-Country Digital Payments Specialist,Better Than Cash Alliance Comfort Boitumelo PhelaneSenior Fintech Analyst,South African Reserve BankGhulam SamadSenior Research Specialist,CAREC InstituteJeanette SimonFinancial Sector Supervis

200、ion Department,Eastern Caribbean Central BankRakesh VermaHead of India Public Policy and Government Relations,Stripe Lucy WongAdviser,Hong Kong Center,BIS Innovation Hub Leanne ZhangAdviser,Hong Kong Center,BIS Innovation Hub Digital Payments Advisory CommitteeNelson ChowChief Fintech Officer,Fintec

201、h Facilitation Office,Hong Kong Monetary AuthorityDante DisparteChief Strategy Officer;Head,Global Policy,Circle Internet FinancialThomas HalpinManaging Director;Global Product Head,Payments,Global Liquidity and Cash Management,HSBC HoldingsCarmen HettTreasurer Division of Financial and Administrati

202、ve Management,United Nations High Commissioner for RefugeesIrene Arias HofmanChief Executive Officer,IDB LabAnneke KosseSenior Economist,Bank for International Settlements Committee on Payments and Market Infrastructures(CPMI)Angeline LamDeputy Director and Head,Payments Policy Division,Payments Dep

203、artment,Monetary Authority of SingaporeForest LinPresident,Tencent Financial Technology,TencentYan LiuDeputy General Counsel,International Monetary FundJesse McWatersSenior Vice-President,Regulatory Affairs Advocacy,MastercardHari MoorthyPartner;Global Head,Transaction Banking,The Goldman Sachs Grou

204、pRichard NashVice-President;Global Head,Government Relations,PayPalKris NatoliMember of Secretariat,Financial Stability BoardSergio NavajasSenior Specialist,The Inter-American Development BankHarry NewmanHead of Banking Strategy,Swift Benedicte NolensHead of BIS Innovation Hub Hong Kong Centre,Bank

205、for International Settlements(BIS)Ryuichi OhnoDeputy Director,International Affairs Office,Strategy Development and Management Bureau,Japan Financial Services AgencyFarid OsmanovExecutive Director,Central Bank of AzerbaijanEmrah enerFormer Deputy Governor,Central Bank of the Republic of TrkiyeRobert

206、 ThomsonGlobal Head,Government Engagement,VisaUnlocking Interoperability:Overcoming Regulatory Frictions in Cross-Border Payments23Endnotes1.World Economic Forum,“Digital Problems for Trade and Commerce Advisory Committee”:https:/www.weforum.org/communities/digital-payments-for-trade-and-commerce-ad

207、visory-committee.2.“Cross-border payment”is defined as fund transfers where the payer and the payee are in different jurisdictions.Committee on Payments and Market Infrastructures(CPMI),BIS Innovation Hub,International Monetary Fund and World Bank,Exploring Multilateral Platforms for Cross-Border Pa

208、yments,January 2023:https:/www.imf.org/-/media/Files/Publications/analytical-notes/2023/English/ANEA2023001.ashx.3.“Regulatory interoperability”is defined as the ability to connect payment systems across different jurisdictions governed by differing regulatory requirements to ensure that transaction

209、s are conducted lawfully.Regulatory interoperability enables other types of interoperability,making it one of the most crucial elements for progress.Regulatory interoperability for payments covers various policies,including but not limited to anti-money laundering(AML)regulations,data and privacy,co

210、nsumer protection and dispute management.Gallaher,Mike,Harper,Chad and Kotschwar,Barbara,Lets Talk about How We Talk about Interoperability,Visa Economic Empowerment Institute,May 2021:https:/ of England,“Cross-Border Payments”:https:/www.bankofengland.co.uk/payment-and-settlement/cross-border-payme

211、nts#:text=The%20value%20of%20cross%2Dborder,trillion%20in%20just%2010%20years.5.Edgar,Dunn&Company,Report:Future Fintech No Borders,Just Horizons:2021 Fintech Report,September 2021:https:/ Trade Organization,Global Trade Outlook and Statistics,5 April 2023:https:/www.wto.org/english/res_e/booksp_e/t

212、rade_outlook23_e.pdf.7.Ibid.8.Harper,Chad and Quibria,Nasreen,Lets Give a Voice to End Users:Cross-Border Payments,Attributes and User Cases,Visa Economic Empowerment Institute,January 2023:https:/ term“fintech”,as defined by the Financial Stability Board(FSB),refers to technologically enabled innov

213、ations within the realm of financial services that have the potential to bring forth new business models,applications,processes or products.10.C,“Top 50 Cryptocurrency Prices,Coin Market Cap,Price Charts and Historical Data”:https:/ Xiao,“Future of Payments:How Central Banks Are Driving Innovation”,

214、World Economic Forum,28 June 2023:https:/www.weforum.org/agenda/2023/06/future-of-payments-how-central-banks-are-driving-innovation/.12.Eastnets,“How AI and Standards Secure Effective Cross-Border Payments”:https:/ Stability Board,Targets for Addressing the Four Challenges of Cross-Border Payments:F

215、inal Report,October 2021:https:/www.fsb.org/wp-content/uploads/P131021-2.pdf.14.BIS Innovation Hub,Project Nexus:Enabling Instant Cross-Border Payments,March 2023:https:/www.bis.org/publ/othp62.pdf.15.BIS Innovation Hub,Project mBridge:Connecting Economies through CBDC,October 2022:https:/www.bis.or

216、g/publ/othp59.pdf.16.BIS Innovation Hub,Project Dynamo:Catalysing Innovation for SME Growth,June 2023:https:/www.bis.org/publ/othp68.pdf.17.“Non-bank payment service providers”refers to entities that are not considered“financial institutions”under the laws and regulations of the place in which they

217、are incorporated or where they are conducting businesses,but which carry out all or some aspects of functions related to payment activities.18.Financial Stability Board,G20 Roadmap for Enhancing Cross-Border Payments:Priority Actions for Achieving the G20 Targets,23 February 2023:https:/www.fsb.org/

218、wp-content/uploads/P230223.pdf.19.World Economic Forum,Digital Currency Governance Consortium White Paper Series:Regulatory and Policy Gaps and Inconsistencies of Digital Currencies,November 2021:https:/www3.weforum.org/docs/WEF_Regulatory_and_Policy_Gaps_2021.pdf.20.International Federation of Acco

219、untants,Regulatory Divergence:Costs,Risks,and Impacts,11 April 2018:https:/www.ifac.org/knowledge-gateway/contributing-global-economy/publications/regulatory-divergence-costs-risks-and-impacts.21.LexisNexis,“2022 True Cost of Financial Crime Compliance Study Global Summary”,2022:https:/ Interoperabi

220、lity:Overcoming Regulatory Frictions in Cross-Border Payments2425.Committee on Payments and Market Infrastructures,Enhancing Cross-Border Payments:Building Blocks of a Global Roadmap:Stage 2 Report to the G20 Technical Background Report,July 2020:https:/www.bis.org/cpmi/publ/d194.pdf.26.Ibid.27.Even

221、ett,Simon J.and Fritz,Johannes,Emergent Digital Fragmentation:The Perils of Unilateralism:A Joint Report of the Digital Policy Alert and Global Trade Alert,27 June 2022:https:/digitalpolicyalert.org/report/emergent-digital-fragmentation.28.Ratha,Dilip,“Global Remittance Flows in 2021:A Year of Recov

222、ery and Surprises”,World Bank Blogs,17 November 2021:https:/blogs.worldbank.org/peoplemove/global-remittance-flows-2021-year-recovery-and-surprises.29.Krebs,Alicia and McWaters,Jesse,“Is Technology the Panacea for Todays Cross-Border Payment Frictions?”,Mastercard Policy Center for the Digital Econo

223、my(PCDE),February 2023:https:/ on Payments and Market Infrastructures,Improving Access to Payment Systems for Cross-Border Payments:Best Practices for Self-Assessments,May 2022:https:/www.bis.org/cpmi/publ/d202.pdf.31.Ibid.32.Ibid.33.The World Bank and International Monetary Fund(IMF),A Draft Framew

224、ork for Money Laundering/Terrorist Financing:Risk Assessment of a Remittance Corridor,September 2021:https:/www.fsb.org/wp-content/uploads/P131221-1.pdf.34.World Economic Forum,Defining and Measuring Payment Interoperability,April 2022:https:/www3.weforum.org/docs/WEF_Defining_and%20Measuring_Intero

225、perability_2022.pdf.35.Arner,Douglas,et al.,Building Regional Payment Areas:The Single Rule Book Approach,BIS Working Paper No.1016,SSRN,May 2022:https:/ Nations Commission on International Trade Law,“Model Law on International Credit Transfers”:https:/uncitral.un.org/en/texts/payments/modellaw/cred

226、it_transfers.37.Financial Stability Board,G20 Roadmap for Enhancing Cross-Border Payments:Priority Actions for Achieving the G20 Targets,23 February 2023:https:/www.fsb.org/wp-content/uploads/P230223.pdf.38.Cornelli,Giulio,et al.,Regulatory Sandboxes and Fintech Funding:Evidence from the UK,BIS Work

227、ing Paper No.901,November 2020(revised April 2023):https:/www.bis.org/publ/work901.pdf.39.Mukherjee,Saurav,“RBI Names 4 Entities Completing Test Phase with Cross-Border Payments Theme”,Mint,19 July 2022:https:/ and PIRI,Pacific Regional Regulatory Sandbox Guidelines,March 2020:https:/www.afi-global.

228、org/wp-content/uploads/2020/07/PIRI_Regulatory_Guideline_digital.pdf.41.World Economic Forum,Defining and Measuring Payment Interoperability,April 2022:https:/www3.weforum.org/docs/WEF_Defining_and%20Measuring_Interoperability_2022.pdf.42.Arner,Douglas,et al.,Building Regional Payment Areas:The Sing

229、le Rule Book Approach,BIS Working Paper No.1016,SSRN,May 2022:https:/ on Payments and Market Infrastructures,BIS Innovation Hub,International Monetary Fund and World Bank,Exploring Multilateral Platforms for Cross-Border Payments,January 2023:https:/www.imf.org/-/media/Files/Publications/analytical-

230、notes/2023/English/ANEA2023001.ashx.44.Ibid.45.BIS Innovation Hub,Project Nexus:Enabling Instant Cross-Border Payments,March 2023:https:/www.bis.org/publ/othp62.pdf.46.Adrian,Tobias,“BigTech in Financial Services”,International Monetary Fund,16 June 2021:https:/www.imf.org/en/News/Articles/2021/06/1

231、6/sp061721-bigtech-in-financial-services.47.Financial Stability Board,G20 Roadmap for Enhancing Cross-Border Payments:Priority Actions for Achieving the G20 Targets,23 February 2023:https:/www.fsb.org/wp-content/uploads/P230223.pdf.48.Adrian,Tobias,“BigTech in Financial Services”,International Monet

232、ary Fund,16 June 2021:https:/www.imf.org/en/News/Articles/2021/06/16/sp061721-bigtech-in-financial-services.49.Restoy,Fernando,Fintech Regulation:How to Achieve a Level Playing Field,Occasional Paper No.17,Bank for International Settlement,February 2021:https:/www.bis.org/fsi/fsipapers17.pdf.50.Worl

233、d Economic Forum,Regulatory and Policy Gaps and Inconsistencies of Digital Currencies,November 2021:https:/www3.weforum.org/docs/WEF_Regulatory_and_Policy_Gaps_2021.pdf.51.Committee on Payments and Market Infrastructures,Improving Access to Payment Systems for Cross-Border Payments:Best Practices fo

234、r Self-Assessments,May 2022:https:/www.bis.org/cpmi/publ/d202.pdf.52.Financial Stability Board,G20 Roadmap for Enhancing Cross-Border Payments:Priority Actions for Achieving the G20 Targets,23 February 2023:https:/www.fsb.org/wp-content/uploads/P230223.pdf.Unlocking Interoperability:Overcoming Regul

235、atory Frictions in Cross-Border Payments25World Economic Forum9193 route de la CapiteCH-1223 Cologny/GenevaSwitzerland Tel.:+41(0)22 869 1212Fax:+41(0)22 786 2744contactweforum.orgwww.weforum.orgThe World Economic Forum,committed to improving the state of the world,is the International Organization for Public-Private Cooperation.The Forum engages the foremost political,business and other leaders of society to shape global,regional and industry agendas.