Anyone who has sent money internationally knows the feeling. Cross-border payments can be frustratingly slow, surprisingly expensive, and opaque—you’re often left wondering where your money is and when it will arrive. In a world of instant digital everything, this friction feels like a relic from a bygone era.

A popular solution often championed in the disruptive, “permissionless” world of tech and crypto is the Central Bank Digital Currency, or CBDC. The idea seems simple: a digital version of a country’s official currency could form the basis of a new, hyper-efficient global payment system. But while the public conversation often frames CBDCs as a straightforward technological upgrade, the world’s most powerful financial institutions see things very differently.

A landmark analysis for the G20, published by the Bank for International Settlements (BIS), methodically dissects the immense challenges and strategic choices involved. Their work reveals a reality that is far more nuanced, cautious, and surprising than the hype suggests. It is a world of difficult trade-offs, where every potential gain in efficiency must be weighed against risks to global financial stability. Here are the five most impactful realities from their official assessment.

1. It’s a Once-in-a-Generation ‘Clean Slate’ Moment

The single greatest advantage of developing CBDCs isn’t just the new technology itself, but the chance to start over. Today’s global payment system is a complex web of legacy platforms built up over decades. Trying to improve this existing structure is, as the report notes, often “costly and difficult.”

CBDCs offer a rare opportunity to design a new system from the ground up. This is a chance to bypass decades of accumulated complexity—from mismatched operating hours across time zones to incompatible data formats and long, costly transaction chains. With a significant number of central banks simultaneously exploring this technology, there is a fleeting window for unprecedented global coordination. This isn’t just about a technical fix; it’s a chance to completely rethink the architecture of international finance.

As with any new system, one key advantage of both retail and wholesale CBDC is the opportunity to start with a “clean slate”.

2. The First Principle: Do No Harm

In Silicon Valley, the mantra is “move fast and break things.” For central bankers, the guiding principle is the exact opposite: do no harm. This isn’t just a preference; it is the first of five major evaluation criteria used in the report—ahead of efficiency, resilience, interoperability, and financial inclusion—demonstrating its absolute primacy. Their foremost priority is to ensure that any new system does not disrupt or destabilize the existing financial order.

In this context, “do no harm” means that a CBDC must not impede a central bank’s core mission of maintaining monetary and financial stability. The report highlights specific macro-financial risks they are determined to avoid. These include:

• Currency Substitution: The risk that citizens of a country with a weaker economy might abandon their local currency in favor of a more stable foreign CBDC, undermining local monetary policy.
• Increased Capital Flow Volatility: The risk that digital currency could make it easier for massive amounts of money to move across borders instantly, potentially causing economic shocks.

Central bankers are acutely aware that these risks are not new, but as the report states, “the availability of CBDCs across borders could reinforce them.” Before a single digital dollar or euro is spent, they are focused on building guardrails to prevent the amplification of these existing dangers.

3. Digital Money Could Mean More Control, Not Less

A common perception, born from the world of cryptocurrency, is that digital money is a tool for borderless, unregulated finance. The central banking view is the polar opposite. The report reveals that CBDCs could be designed to increase the effectiveness of financial controls, not eliminate them.

Capital Flow Management measures (CFMs)—the rules governments use to regulate money moving in and out of a country—could be directly embedded into a CBDC’s software. The report gives a clear example: digital wallets could be programmed with built-in caps on the number or value of cross-border transactions a user can make in a given period. This vision positions CBDCs not as rivals to Bitcoin’s unregulated freedom, but as a high-tech evolution of state-managed monetary policy.

4. There’s No Single Magic Bullet Solution

Despite the desire for a simple fix, the report concludes there is “no ‘one size fits all’ model” for a cross-border CBDC system. Central banks are exploring three high-level models for getting different national systems to work together, each with its own trade-offs.

• Compatibility: Different national CBDC systems agree to use common standards, like agreeing all new electronics will use the USB-C standard. This is the simplest approach but may offer limited benefits.
• Interlinking: Separate national systems are connected through a technical link or a central hub, like creating universal travel adapters that connect any plug to any outlet.
• A Single System: Multiple countries agree to use one shared platform for their respective CBDCs. This is the most complex but potentially most efficient model, like a world where every country agrees to adopt the exact same power outlet and voltage, eliminating the need for adapters entirely.

This raises a crucial and sobering possibility: the most advanced solutions might end up benefiting the wealthy economies that need them least, while the very people suffering most from today’s broken system—like migrant workers sending money home—could be left using the same slow, expensive rails.

5. Even Countries Opting Out Are Still Part of the Game

Perhaps the most surprising takeaway is that this is a global conversation no one can afford to sit out. The report makes a critical point: even countries that ultimately decide not to issue their own CBDC must still be deeply involved in the planning and standardization process.

The logic is simple. As other nations move forward, the global financial system will change regardless. Countries without a CBDC will inevitably need to interact with those that have one. To avoid being cut off or forced into unfavorable arrangements, every jurisdiction has a vested interest in shaping the rules of this new financial landscape from the outset. This is a matter of maintaining national economic sovereignty in a rapidly evolving world.

Even jurisdictions not planning to issue a CBDC ought to be involved in this work as they will still be part of this new potential cross-border payments landscape.

Conclusion: A Deliberate Revolution

The analysis from the world’s central banks makes it clear that building the future of global payments is not a simple technological sprint. It is a deliberate, methodical process filled with complex trade-offs between efficiency for users, stability for economies, and inclusion for the underserved.

Ultimately, these five realities paint a clear picture: central banks are pursuing a deliberate revolution, not a disruptive one. The goal is to absorb new technology into the existing order to enhance control and stability, not to cede power to decentralized networks. As this new global financial plumbing is installed, which of these competing priorities should be the ultimate goal: maximum efficiency for users, absolute stability for governments, or equitable access for the world’s most vulnerable?

Sources –

Main Article –

Options for access to and interoperability of CBDCs for cross-border payments, July 2022, Report to the G20, available at https://www.bis.org/publ/othp52.pdf

Other Sources-

1. Auer, R and R Boehme (2021): “Central bank digital currency: the quest for minimally invasive technology”, BIS Working Papers, no 948, June.

2. Auer, R, P Haene and H Holden (2021): “Multi-CBDC arrangements and the future of cross-border payments”, BIS Papers, no 115, March.

3. Bank for International Settlements Innovation Hub (2022): Using CBDCs across borders: lessons from practical experiments, June.

4. Bank for International Settlements and World Bank Group (2022): “Central bank digital currencies: a new tool in the financial inclusion toolkit?”, FSI Insights, no 41, April.

5. Kosse, A and I Mattei (2022): “Gaining momentum – Results of the 2021 BIS survey on central bank digital currencies”, BIS Papers, no 125, May.