The launch of the central bank digital currency (CDBC) could help global businesses save about $100 billion a year that would otherwise be spent processing cross-border transactions, JPMorgan said in a recent report.
JPMorgan chase and management consulting firm Oliver Wyman cooperation the report studied an all-weather real-time running full scale multilateral bank digital currency (mCBDC) network, and focus on southeast Asia, which accounts for about 7% of global cross-border trade, has nearly 12 kinds of currencies, and focus on the thousands of multinational companies in Europe, Asia and North America.
JPMorgan said that while banks and foreign exchange companies would have to rethink their current products and operating models, the mCDBC could be “of long-term benefit to all participants”.
Globally, companies move almost $23.5tn between countries each year, equivalent to about 25 per cent of global GDP, JPMorgan adds. But banks have to “rely on wholesale cross-border payment processes, which remain sub-optimal from the point of view of cost, speed and transparency”.
On top of that, there are additional costs of foreign exchange, blocked liquidity and settlement delays.
As the crypto market booms, CBDC has been front and center in the digital asset conversation.