A new report from JPMorgan and consulting firm Oliver Wyman found that a “multiple central bank digital currency” network could save global corporations $100M a year in cross-border transaction costs.

Why should we care?
Cross-border payments have traditionally been expensive, time-consuming, and characterized by a lack of transparency. Major banks, through the SWIFT network, along with fintechs, have been working to make the delivery of cross-border payments cheaper and faster. Last month, two large payment clearing companies in the U.S. and Europe partnered with cross-border payment network SWIFT (Society for Worldwide Interbank Financial Telecommunication) in an effort to streamline international payments. Tapping a network of multiple central bank digital currencies (CBDCs) cuts out intermediaries and could result in significant cost reductions for companies, the report said. “The bulk of today’s wholesale cross-border payments process remains suboptimal due to multiple intermediaries between the sending and receiving banks, often resulting in high transaction costs, long settlement times, and lack of transparency on the status of the payments,” according to Oliver Wyman partner Jason Ekberg. The JPMorgan-Oliver Wyman report suggests a multiple central bank digital currency network for cross-border payments would include simultaneous settlement, 24/7 infrastructure availability, shortened transaction chains, and transaction pre-validation within the network.