Badung, Bali (ANTARA) - The implementation of cross-border payments is still posing several challenges, such as high costs, limited access sources, and lack of transparency, Governor of Bank Indonesia (BI) Perry Warjiyo has said.
"Hence, international cooperation needs to be strengthened, considering that the digitalization of the economy and finance sector has increased," he added at a side event of the Indonesian G20 Presidency entitled “Advancing Digital Economy and Finance” here on Thursday.
Digitization needs to be accelerated to boost inclusive economy and finance, such as for remittance, retail trade, as well as micro, small, and medium enterprises (MSMEs), he said.
Therefore, accelerating economic and financial digitization has become a global initiative, with the G20 and the Financial Stability Board (FSB) raising the issue of strengthening and advancing cross-border payments as one of the priority issues of the 2022 G20 presidency The FSB was established in April 2009 after the G20 London summit and serves as an international body that monitors and provides recommendations concerning the global financial system.
The BI governor said that the G20 nations have launched a cross-border payments road map to address the challenges and provide guidance on developing payment connectivity during Indonesia’s G20 presidency.
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Furthermore, the 2022 G20 will prioritize completing an integrated payments system for cross-border payments and the harmonization of data exchange protocols.
"The FSB Cross-border Payments Coordination Group will monitor the implementation of the road map," Warjiyo informed.
The G20 and the FSB have also been given the task of advancing the development of the central bank digital currency (CBDC), he noted.
The effort requires multilateral collaboration to ensure a collective understanding of digital currency, and improve understanding of the implications of using CBDC in the international financial system.
Attempts to integrate the economy and finance sectors have also been made by ASEAN, which already has a payment connectivity road map, the BI governor informed.
In addition, a strategic business plan has been developed, which will seek to integrate regional—ASEAN’s--and global initiatives—the G20 and FSB’s.
Five ASEAN central banks, comprising the central banks of Indonesia, Singapore, Malaysia, Thailand, and the Philippines, will begin collective cross-border payments integration, fast payment connectivity, and local currency utilization cooperation in 2022.