Redesigned RTGS System
Reimagining the Payment System
Collaborative project with the Bank for International Settlements (BIS), the Central Bank of Chile, and QuantumX.
We propose a novel model that offers access to a new payment system not only to banks but also to BigTech and FinTech companies through a tiered access approach.
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~96% of countries globally possess a Real-Time Gross Settlement (RTGS)
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The RTGS is a 'backbone' of payments, usually managed by the Central Bank. Most RTGS systems restrict access only to banks.
Most RTGS systems restrict direct access only to banks
The Central Bank is crucial in managing the payment ecosystem: ~90% of the world's money supply is in digital form
Commercial banks hold funds in accounts within Central Banks (RTGS) for interbank payments, while Central Banks provide liquidity (intraday credit) to commercial banks
Central banks are rethinking the structure of the monetary and financial system
The growing presence of BigTech and FinTech companies, along with novel forms of money such as crypto-assets and stablecoins, is prompting the inclusion of non-bank players in the RTGS
Attend consumer segments traditionally underserved by banks
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Have the potential to generate significant efficiency gains and lower barriers to market entry
Big Tech & Fintech
The entry of BigTech and FinTech players into the payment ecosystem is already creating a division between 'banks' and 'non-banks' payments, particularly in emerging markets
This fragmentation of the payment infrastructure is leading to negative consequences for the monetary system as a whole:
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Lack of interoperable payment infrastructure
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Duplication of exiting bank-based infrastructure
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Regulatory arbitrage
The solution
It becomes essential to create a modern RTGS infrastructure accessible to both banks and PSPs for a stable financial system, reinforcing central banks' role
The declining relevance of the RTGS system in terms of transactions relative to GDP may be attributed to non-banks' lack of access to the system
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Enabling RTGS access for non-banks can support the efficiency and competition of financial markets by promoting a greater diversity of payments and risk-reducing payment technologies.
Why a tiered approach instead of direct access for PSPs? To satisfy institutional, regulatory, and legal constraints
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