1. Digital Fiat Currency, SDR and New Cross-Border Payment System
- Author:
- Liu Dongmin and Song Shuang
- Publication Date:
- 03-2018
- Content Type:
- Policy Brief
- Abstract:
- Emerging economies have played more and more important roles in the world, and have become a significant drive in the reform of global financial governance to push it towards the direction of inclusiveness and resilience. As a key part of the international financial architecture, the dollarized cross-border payment system has not been changed correspondingly. Along with the rapid development of digital currency, the digital fiat currency (DFC) endorsed by national credit shows great potential in improving the current cross-border payment system. We propose that the new system based on DFC can be done in three patterns and the third one is most feasible: IMF-leading pattern, countries-leading pattern and the coexisting pattern. The new system will effectively reduce the transmission time and cost of cross-border payment services due to DFC’s peer-to-peer mode. Moreover, as the new system becomes more open, more flexible and more inclusive, all the developing countries will get fair and easy access to these services.
- Topic:
- Finance, Currency, and Economic Development
- Political Geography:
- China, Global Focus, and Global Markets