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RTGS Global launched Stage One of its real-time gross settlement platform which it says could revolutionise cross-border bank payments. The platform RTGS allows commercial and central banks to settle transactions instantly, authenticating the exchange of funds and creating real-time liquidity between participants. Stage two this autumn will see RTGS Global integrate its technology as an automatic add-in to Microsoft Azure, as part of a partnership with Microsoft, and further lowering the barrier to adoption for many banks. https://rtgs.global/ https://www.finextra.com/newsarticle/34482/nick-ogden-launches-cross-border-liquidity-network-rtgsglobal

In this March 31 speech, the Bank of England's Victoria Cleland introduces Project Meridian, a joint initiative with the BIS Innovation Hub that will prototype and test end-to-end flow of real-time gross settlement (RTGS) platform synchronized settlement, which could be used for different trades such as securities and foreign exchange. Synchronization would enable the cash movements in RTGS to happen if and only if a corresponding asset on another ledger is transferred, which is something that wholesale central bank digital currency (WCBDC) aficionados imply requires a distributed ledger technology (DLT) platform. Ms. Cleland makes a point that I make frequently in webinars and workshops:  "I do wonder though whether the term "wholesale CBDC" is a misnomer. Electronic central bank money has been available to financial institutions for decades via RTGS systems. In the provision of central bank infrastructure the key is not the label, but who can access it and what functionality is provided."

The Bank of England (BoE) published its roadmap for the real-time gross settlement (RTGS) service beyond 2024 that was informed by public responses to the consultation paper published in April 2022. The objective of modernizing the RTGS service is to offer a more accessible, functional and resilient platform for digital settlement in central bank money. The roadmap pushes back on the idea of putting wholesale payments on distributed ledger technology (DLT) (e.g., via "wholesale central bank digital currency (CBDC)") rails. It points out that the RTGS Renewal Programme will realize a number of benefits commonly associated with such platforms more quickly than it would be possible to launch an entirely new wholesale settlement platform and achieve scale in its usage.

"Montran Corporation and eCurrency Mint announced today the successful integration of Montran's Real Time Gross Settlement (RTGS) with eCurrency's Central Bank Digital Currency (CBDC) platform. As a result, CBDC is seamlessly interfaced with central bank currency management payment operations. The first implementation is the Bank of Jamaica which currently has Montran's RTGS deployed for final settlement in Jamaican Dollars and is in the process of a national rollout of the eCurrency solution to provide Jamaica's Central Bank Digital Currency, Jam-Dex."

The Bank for International Settlements is opening a consultation on the propsect of extending and aligning payment system operating hours to improve cross-border payments. The consultative report from the Committee on Payments and Market Infrastructures (CPMI) focuses on the operating hours of real-time gross settlement (RTGS) systems. The CPMI says an extension of RTGS operating hours across jurisdictions could help address current obstacles, thereby increasing the speed of cross-border payments and reducing liquidity costs and settlement risks.

"In today's fast changing environment, High Value Payment System operators require enhanced efficiency, more security, more resilience, and deeper integration from their RTGS vendors to make sure they meet the demands of the interbank market. As the world's premier supplier of open, future proof and platform independent RTGS solutions, Montran is fully aligned to market expectations and future initiatives."

The Federal Reserve Board has announced that the Federal Reserve Banks will build and operate the FedNowSM Service, a new interbank 24x7x365 real-time gross settlement (RTGS) service with integrated clearing functionality to support faster payments in the United States. The decision to develop the new RTGS service (Off-site) was based on an assessment of public input and policy criteria regarding the Federal Reserve's role in the payment system.

The Federal Reserve is still weighing up the possibility of launching a round-the-clock real-time gross settlement (RTGS) system, but will reach a decision "soon", chair Jerome Powell said.

"To really determine whether concepts like central bank digital currencies (CBDCs) are a logical evolution, it's thus essential to step back in time as far back as the 80s when the big fintech discussions of the day were centred not around distributed ledgers or cryptocurrencies but RTGS systems."

The Bank of England unveiled a new type of omnibus account as part of its real-time gross settlement (RTGS) service. Under the new model, an operator of a payment system can hold funds in the omnibus account to fund their participants' balances with central bank money. An omnibus account co-mingles funds from different entities for the purposes of wholesale settlement. The new type of account is not limited to wholesale transactions such as buying gilts, but can be used to settle transactions on behalf of customers, such as a small business paying a supplier.

RTGS.global aims to link together the existing wholesale payments infrastructure run by central banks within their borders, to settle cross-border payments in real time, and vastly cut down on the costs and burden of the correspondent banking system.

As part of modernizing its core payments infrastructure, Canada will replace the Large Value Transfer System (LVTS) with a new Real-Time Gross Settlement (RTGS) system called Lynx. An important question for policy-makers is how Lynx should be designed. This paper presents simulation results to aid in the design of Lynx. The main interest of policy-makers is to measure the liquidity demands of the system and the corresponding amount of time it takes to settle the value and volume of transactions typically observed in LVTS. To assess this, we developed a simulation environment of the Lynx system using the description of its vendor. We evaluated a variety of configurations of Lynx under several payment demand scenarios. With an initial liquidity comparable to one pledged in LVTS today, Lynx with a first in, first out (FIFO) bypass configuration would require a higher level of liquidity than LVTS or a plain-vanilla RTGS with pooled liquidity. This suggests Lynx could be made significantly more efficient, warranting further research.

The Central Bank of Iceland (CBI) has gone live with a new real-time gross settlement system (RTGS) and instant payment platform. Developed by Italy's SIA, the new payments infrastructure has been implemented as a single platform capable of processing bank-to-bank, P2P, P2B and B2B transactions in a consolidated operating model. https://www.cb.is/publications/news/news/2020/10/19/New-interbank-payment-system-launched-at-the-end-of-the-week/

Swiss National Bank (SNB) Chair Thomas Jordan provided an update on the central bank's central bank digital currency (CBDC) experiments and thinking. Firstly, the SNB's position remains that there is no need for a Swiss retail CBDC because digital payment requirements are already satisfied, and there are possibly far-reaching consequences for the financial system. However, the SNB continues to advance its wholesale CBDC work aimed at settling tokenized securities on the SIX Digital Exchange (SIX) platform. He also called attention to the unusual approach of issuing the CBDC on a third-party (i.e., SDX) platform. However, as pointed out by Ledger Insights, SIX also operates the Swiss real-time gross settlement (RTGS) system, so a trust relationship already exists. However, the SNB is also evaluating other options for tokenized securities settlement, such as the RTGS "trigger" solutions being tested by the European Central Bank in its wholesale CBDC experiments. https://www.snb.ch/en/publications/communication/speeches/2024/ref_20240408_tjn

The BIS Committee on Payments and Market Infrastructures (CPMI) published a review of recent developments in retail fast payment systems (FPS). It notes that FPS can have significant implications for the operations and services of real-time gross settlement (RTGS) systems, including potential modifications to their access criteria and operating hours. The report also finds that FPS adoption rates are generally low in the early stages of implementation, but some recent ones have seen more rapid take-up. Also, FPS are increasingly settling obligations between banks and, where relevant, non-bank FPS participants on a gross (ie payment-by-payment) basis in real time, and most jurisdictions have either adopted or are moving towards ISO 20022 as the FPS messaging format.

The Reserve Bank of Vanuatu launched a new national digital payment platform, VANKLIA, to strengthen its digital economy and promote financial inclusion. The VANKLIA system has two main components: a Real-Time Gross Settlement (RTGS) component which carries out high value and high priority payments and settlement in real time; and an Automated Clearing House (ACH) component which facilitates the clearing of low value, high volume electronic fund transfers for batch payments such as salary payments and instant fund transfers for retail payments.

"Lynx is a critical system for transferring high-value payments quickly and safely between financial institutions in Canada. Since its launch, Lynx appears to achieve a good trade-off between credit risk, settlement speed and liquidity efficiency. Traditionally, a common concern with an RTGS system is that it requires more liquidity, though it does settle payments in real time and remove credit risk between participants. Results show that Lynx makes efficient use of liquidity while quickly processing payments in the queue. This sound system design and the strong collaboration between Payments Canada, financial institutions and authorities have helped make the transition from the LVTS to Lynx a success."

If anything, what the central bank RTGS/LSM two-step teaches us is that we need a good balance between fast and slow. Sure, real-time settlement is a nice feature. But let's also have delayed settlement. If brokerages have a choice to use some combination of two-day and real-time settlement, we may arrive at a socially optimal stock settlement rate.

Accenture, SAP and R3 will work together to build a real-time gross settlement (RTGS) system that will allow for integration and interoperability between DLT-based and classic government-issued payments and settlements. The prototype design uses currency tokens to facilitate end-to-end settlement.

According to this paper by Diem/Novi's Christian Catalini and Andrew Lilley there are at least three ways to remove frictions in payments and rapidly expand the number of individuals and businesses that can access the financial system and cheaply transact in real time. The first is to bring deposits on a single ledger through a central bank digital currency (CBDC), so that transfers between banks are not limited by external liquidity constraints or third-party rails. The second approach is to follow countries such as India and Mexico and increase the throughput of always-on real-time gross settlement (RTGS) systems, the model the US Federal Reserve is pursuing with the introduction of FedNow, targeted for 2023. The third approach is to facilitate the growth of interoperable, stablecoin payment rails by creating the right regulatory framework for these new types of networks to safely increase competition in payments.