Bejoy Das Gupta, Chief Economist; Miles Au Yeung, Chief Markets Officer
This white paper examines the opportunities to reduce cost, increase efficiency, mitigate counterparty risk and improve transparency of cross-border payments using the eCurrency eSDR solution for financial service providers and central banks. The solution would enable participating financial service providers to issue, transact and settle with eSDR, a global digital composite asset of stable value, which utilizes the International Monetary Fund’s Special Drawing Right (SDR) as the reference currency basket. The same technology can of course be used with other suitable regional currency baskets as a reference point. The development of the eSDR solution has its genesis in a speech by Christine Lagarde, Managing Director of the International Monetary Fund, delivered September 2017 at the Bank of England, in which she said, “…the Fund will also have to be open to change....to considering a role for a digital version of the SDR…”