Op-ed by Circle following a roundtable discussion which took place during the Japan FinTech Festival 2024
5 June 2024 - While commerce has gone digital, the payment infrastructure underneath it is decidedly analog. Much of the developed markets deal with T+2 day settlement time or more (not including weekends and holidays) and the experience in emerging markets is even more dire. Why does it still take days for merchants to receive payments from their customers?
“The cross-border payment infrastructure hasn’t changed since the 1970s,” says one of the participants at the standing-room-only Digital assets: Foundational infrastructure to unlock the internet of value roundtable held at the Japan FinTech Festival in March.
Discussants honed in on the transformative potential at the intersection of blockchain innovation and regulatory framework. Delayed settlement time puts sands in the gear of global commerce. Hundreds of millions of small- and medium-sized businesses transact with billions of customers globally, accounting for over $17 trillion of cross-border transactions annually. BCG estimated that the tokenisation of real world assets could reach 10% of global GDP by 2030—in a conservative scenario.
While participants didn’t agree on everything, there was general consensus on the path forward with digital assets. No longer was it a debate about whether blockchain-based finance is real or not; it decidedly is. There was no debate about central bank digital currencies (CBDCs) versus tokenised deposits versus stablecoins; we need them all and users will pick different ones for different use cases.
One participant summarised the next steps as the 3 Cs calibration, collaboration, and clarity.
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