Global: U.S. Advocates Innovation and Regulation for Cross-Border Payment Systems

The United States is actively working to maintain the U.S. dollar’s position as the dominant global currency amid emerging cross-border payment systems. Speaking on Tuesday, November 19, at a Federal Reserve Bank of New York conference, Brent Neiman, the U.S. Department of the Treasury’s Assistant Secretary for International Finance, emphasized the benefits of dollar dominance for the U.S. and its allies.

Neiman outlined the U.S. strategy to achieve this goal by promoting innovation in payment systems, implementing robust regulatory frameworks, and advancing international standards to ensure financial security and mitigate risks associated with illicit activities.

Innovations in Cross-Border Payments

Highlighting advancements in payment technologies, Neiman cited the Federal Reserve’s involvement in several global initiatives:

• Project Agorá: A Bank for International Settlements initiative exploring tokenized integration of central bank and commercial bank money.
• Project Cedar x Ubin+: A collaborative effort with the Monetary Authority of Singapore aimed at enhancing multi-currency wholesale cross-border payments.
• Bilateral Connectivity: The Treasury and other U.S. agencies are working to strengthen connections between bilateral payment systems to improve cross-border transaction efficiency.

Strengthening Regulatory Frameworks

The U.S. is also focused on regulatory collaboration with international partners and the private sector. This includes supporting the G20 Roadmap to Enhance Cross-Border Payments, which aims to improve the flow of financial data across borders while ensuring transparency and compliance.

Neiman noted the importance of establishing global standards that promote financial stability and protect individuals from fraud and illicit financial activities.

Leadership in Cross-Border Payment Governance

“The United States must lead in cross-border payments to ensure that emerging systems meet high standards of governance and financial stability,” Neiman said. He underscored the U.S. commitment to steering the development of internationally significant payment systems in alignment with these principles.

While the U.S. strengthens its initiatives, alternative frameworks are taking shape. Reports from October highlighted Russia’s proposal for a cross-border payment system within the BRICS bloc (Brazil, Russia, India, China, South Africa, and new members like Iran, the UAE, Ethiopia, and Egypt).

However, Russian President Vladimir Putin later clarified that BRICS central banks would leverage existing financial messaging systems for facilitating payments in national currencies, with no plans for a separate system.