I recently had the opportunity to speak at the International Monetary Fund’s World-Bank Annual Meetings in the panel “Cross-Border Payments – The Private Sector Steps Up.” It was a lively panel discussion that included Jonathan Dharmapalan (CEO, eCurrency), Rory MacFarquhar (Senior VP, MasterCard), Rene Reinsberg (CEO, Celo), and was moderated by Dong He (Deputy Director, Monetary and Capital Markets Department, IMF). We were able to discuss what role the private sector plays when it comes to enabling the future of cross-border payments.
The private sector has long been a leader when it comes to offering new solutions and technological developments. However, it’s important that private organizations build these products and services not only with the freedom to innovate, but with the intent on making them truly sustainable and practical for the end-users.
In short, we need innovation, competition and interoperability.
This is especially pertinent to cross-border payments. In the next 3-5 years, in order to see the success that we believe is possible with blockchain technology in cross-border payments, we need to be really good at focusing on use case development versus just focusing on the technology. That means we need to:
By consistently approaching solutions from a use case perspective rather than the technology itself and applying standards of interoperability, we can reduce friction for users and developers, create efficiencies resulting in decreased costs for developers and users, and enhance competition and innovation.
Regulation and compliance are the other crucial pieces to this puzzle. To ensure we are helping to grow access to the financial system, we need to build the necessary safeguards for users, businesses, and institutions alike. If we can demonstrate how interoperability enhances the already-existing financial infrastructure, regulated institutions that touch fiat will be encouraged to adopt innovative solutions on an open-source network and shift payments over to faster, cheaper, and more efficient rails.
At the end of the panel, I reiterated that permission-less networks are the infrastructure layer that allows entities to build and innovate upon ideas and products that will solve the lack of financial inclusion all over the world. These solutions will allow users to send payments via phone, without a bank account, and within 3-5 seconds – and that’s just the tip of the iceberg for the potential created by open-source networks.
[The IMF’s World-Bank Annual Meetings hosted a panel on “Cross-Border Payments – The Private Sector Steps Up,” covering topics such as current shortcomings of cross-border payments, how the private sector pushes for new technological developments and innovations, and what entrepreneurs can expect from policymakers and regulators. Moderated by Dong He (Deputy Director, Monetary and Capital Markets Department, International Monetary Fund), this panel featured panelists Denelle Dixon (CEO & Executive Director, Stellar Development Foundation), Jonathan Dharmapalan (CEO, eCurrency), Rory MacFarquhar (Senior VP, MasterCard), and Rene Reinsberg (CEO, Celo).]