Tokenisation and Cross Border Payments: How One Payment Gets Rewired

About this episode

The episode discusses the complexities of cross border payments and how tokenisation can simplify the process.

Pick a simple scenario. You are in the UK, you need to pay a supplier overseas. Today, that “one transfer” is usually a relay race: your bank checks you, messages the payment, lines up FX, routes through one or more correspondent banks, updates a chain of nostro and vostro accounts, then everyone reconciles their own records, often around cut off times and time zones. Each hop adds cost, delay, and the classic “where is my money right now?” fog. Now replay the same payment in a tokenised settlement world. Instead of separate systems for messaging, compliance, reconciliation, FX, and settlement, the idea is that money and assets can be represented on a shared programmable platform so the transfer and the checks can happen as one integrated flow. The BIS has been very direct about the goal here: replace the complex chain of intermediaries and sequential account updates in correspondent banking with something more unified. We keep it grounded by comparing three flavours of “digital money”, without the jargon soup: Tokenised bank deposits: your commercial bank money, but represented as tokens, still sitting inside the familiar two tier system (banks plus central bank), just with…

People in this episode

Host: Michael J Burgess

Topics covered

• tokenisation
• cross border payments
• digital money
• financial technology
• settlement systems

Keywords

• tokenisation
• cross border payments
• digital money
• BIS
• Project Agorá
• stablecoins
• settlement

Mentioned in this episode

Organizations: BIS

Products: Project Agorá, stablecoins

Places: UK