Korea and BIS: Cross-Border Payments

South Korea joins the global initiative exploring the possibility of tokenizing cross-border payments, alongside central banks and credit institutions from seven different economies.

The collaboration with the Bank for International Settlements (BIS) signifies a significant milestone for Korea, emphasizing the country's commitment to the development of a central bank digital currency (CBDC).

Exploring Cross-Border Payments

According to reports from TheKoreaTimes, Korea's involvement in this global project opens up new prospects for private financial institutions and businesses in the digital finance sector, especially in trade financing.

The project, involving central banks from five reserve currency economies, aims to utilize tokenization to improve the speed and integrity of international payments while reducing costs.

Tokenization and Transaction Efficiency

The initiative also aims to strengthen the detection of money laundering attempts and customer verification processes, currently delayed and costly due to the involvement of multiple intermediaries. Through tokenization, the project aims to combine the functions of traditional database record-keeping with the rules and logic governing transfers.

Shin Hyun-song, BIS Economic Adviser and Head of Research, emphasized that the Agorá project enhances international payments by harnessing the potential of tokenization to address the efficiency issues of cross-border transactions while maintaining the integrity and governance of the monetary system.

Expected Updates

Further updates are expected as this story evolves. Monitoring the development of this initiative is crucial, given its potential to shape the future of international cross-border payments.

*This is not a financial advice