Advancing Cross-Border Payments with Intrasettle's mCBDC Model 1: Safeguarding Currency Sovereignty with Central Bank Money
The G20 has identified CBDC as a potential solution to improve cross-border payments, which is a global priority. A successful cross-border payment solution should be immediate, cheap, universally accessible, and settled in a secure medium. For wholesale payments, central bank money is the preferred medium for financial market infrastructures. A multi-CBDC platform, where multiple central banks can issue and exchange their respective CBDCs, is a particularly promising solution for achieving this vision. Intrasettle is a wholesale multi-CBDC project that aims to advance towards this goal.
Intrasettle is experimenting with a cross-border payment system that utilizes a common blockchain-based platform. The platform enables multiple central banks to issue and exchange their respective central bank digital currencies (multi-CBDCs). Intrasettle believes that an efficient, low-cost, and common multi-CBDC platform can provide direct connectivity between central banks and commercial participants, which has the potential to increase international trade flows and cross-border business.
To test this idea, Intrasettle has chosen the BSV Blockchain and STAS as the specialized token protocol for CBDC issuance and multicurrency cross-border payments. The token system has been designed with scalability and the UTXO model for security, compliance, legal requirements, regulations, and governance needs.
The platform design adheres to the five overarching CBDC principles developed by the CPMI, BIS Innovation Hub, IMF, and World Bank joint report to the G20, which are: do no harm, enhancing efficiency, improving resilience, assuring coexistence and interoperability with non-CBDC systems, and enhancing financial inclusion. The platform has also integrated the basic blockchain principles of immutability and programmability.
Intrasettle aims to build an MVP (minimum viable product) and move towards a production setting that improves solutions for the key pain points of international payments, advances cross-border settlement in central bank money, supports the use of local currencies in international transactions, and creates an opportunity for new and innovative payment products and services. This will be achieved while safeguarding currency sovereignty and monetary and financial stability by appropriately integrating policy, regulatory and legal compliance, and privacy considerations.
To achieve this, Intrasettle adopts a single-platform, direct-access CBDC model that hosts multiple CBDCs on a common technical infrastructure. Local and foreign financial institutions can directly hold and transact in CBDCs issued by central banks, irrespective of jurisdiction.
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Intrasettle uses BSV Blockchain to support real-time, peer-to-peer, cross-border payment and foreign exchange (FX) transactions through a payment versus payment (PvP) arrangement using CBDCs. This approach offers potential improvements in speed, transparency, efficiency, resilience, access, costs, and settlement-risk reduction compared with the existing correspondent banking model. Given its common platform, Intrasettle also achieves, by design, interoperability between domestic traditional clearing systems as participants from multiple jurisdictions can directly reach each other on a single, integrated technical platform. Access to CBDC and modules for connecting to existing payment systems can also foster greater financial inclusion for jurisdictions that are experiencing a decrease in active correspondent banking links or decreased transaction flows.