The Bank for International Settlements (BIS) has recently formed a panel to enhance cross-border payments by promoting the harmonisation of API protocols. The panel, which includes representatives from central banks, financial institutions, and technology companies, aims to develop a set of common standards for APIs (Application Programming Interfaces) used in cross-border payments.
APIs are a set of protocols that allow different software applications to communicate with each other. In the context of cross-border payments, APIs are used to connect different payment systems and facilitate the transfer of funds between them. However, the lack of standardisation in API protocols can create inefficiencies and increase the risk of errors and fraud.
The BIS panel aims to address these issues by promoting the adoption of common standards for APIs in cross-border payments. This would enable different payment systems to communicate with each other more efficiently and securely, reducing the risk of errors and fraud.
The panel’s work is part of a broader effort by the BIS to improve cross-border payments. In 2019, the BIS launched the “Global Payments Innovation Initiative” (GPII), which aims to enhance the speed, efficiency, and security of cross-border payments. The GPII includes a set of principles for improving cross-border payments, such as transparency, speed, and cost-effectiveness.
The harmonisation of API protocols is an important step towards achieving these principles. By promoting the adoption of common standards for APIs, the BIS panel can help to reduce the complexity and cost of cross-border payments, making them more accessible to businesses and individuals around the world.
The panel’s work is also important in the context of the growing use of digital currencies and blockchain technology in cross-border payments. These technologies rely heavily on APIs to facilitate transactions, and the lack of standardisation in API protocols can create barriers to their adoption.
By promoting the adoption of common standards for APIs, the BIS panel can help to facilitate the integration of digital currencies and blockchain technology into cross-border payments. This could have significant benefits for businesses and individuals, such as faster and cheaper transactions, greater transparency, and increased security.
In conclusion, the BIS panel’s work to promote the harmonisation of API protocols is an important step towards improving cross-border payments. By developing common standards for APIs, the panel can help to reduce the complexity and cost of cross-border payments, making them more accessible to businesses and individuals around the world. The panel’s work is also important in the context of the growing use of digital currencies and blockchain technology in cross-border payments, as it can help to facilitate their integration and adoption.
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- Source: Plato Data Intelligence.