RCIF | Research Center for International Finance
Policy Brief No. 2018.003
Mar. 4 2018
Digital Fiat Currency, SDR and New Cross-Border Payment System
Liu Dongmin, Song Shuang
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.
1. The Changes of Global Financial Governance and the Limitations of Current Cross-Border Payment System
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2. The Opportunities and Challenges that Digital Currency brings to the Cross-Border Payment System
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3. New Cross-Border Payment System Based by DFC and SDR
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4. Regulations on DFC-based Cross-Border Payment System
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