We have seen liquidity pressures hit the headlines on numerous occasions in the first half of 2023, as banks and other financial institutions continue to feel the strain of market challenges. For years, banks and the economy as a whole have benefited from abundant and cheap liquidity, but continually changing conditions have demanded a new approach in order to re-establish control over liquidity in response to rising interest rates, quantitative tightening and economic uncertainty.
This uncertainty has thrust the importance of liquidity into the limelight.
Growing Demand for a Faster, more Reliable System
To minimise risk, there is growing demand for a system that enables payments to flow faster and more reliably, creating complete visibility over pools of liquidity around the world.
In our last blog, we explored the concept of ‘a borderless future’ for banking, one where cross-border payments are seamless, liquidity becomes easier to hold and move, friction is removed, and payments become instantaneous. This can be achieved by connecting global banks through a unique settlement fabric, underpinned by public and private sector collaboration.
This is exactly what we are pioneering at RTGS.global. We believe that by replumbing the financial networks that support cross-border payments, the multiple points of friction and lack of visibility that have plagued the banking industry for decades can be addressed, and for the first time, banks can gain complete visibility of liquidity with their counterparties.
A Global Web for Settlement
By connecting banks, as well as the settlement networks of individual countries, into a global web, banks in any country can connect to exchange value across currencies, and send and receive funds instantly, with no delay, minimal risk, and full transparency.
Through this system, every international transaction can be matched to corresponding real-time institutional liquidity.
In times of economic instability, inefficient processes and slow transaction speeds become even more problematic. It’s time therefore, that banks prioritise removing risk associated with moving money around the world and embrace the adoption of new technologies that will revolutionise the global payments industry.
Solving for the Long-Term as well as for Today
RTGS.global has been built for fiat currency settlement as well as CBDC settlement. . This is because we believe it is imperative to design for future classes of money and not just fix the ills of today’s fiat world.
In Summary
To address liquidity pressures – and solve the underlying problems currently preventing cross-border payments from moving efficiently around the world – we must fundamentally re-wire the foundations upon which money moves.
This can be achieved through a system which organises bank ledgers to provide clarity on the possession and location of money in any part of the world, at any time.
Banks, businesses, governments and ordinary citizens desperately want and need a payments system that can keep up with today’s rapidly moving global digital economy. With continued public and private sector collaboration, this will become a reality sooner than was ever thought possible.
