By Wen Chen
On 18 March 2021, UNSW Law’s Herbert Smith Freehills China International Business and Economic Law (CIBEL) Centre Co-Director Professor Heng Wang joined a panel for an online conference hosted by the Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements (BIS), “Pushing the frontiers of payments: towards faster, cheaper, more transparent and more inclusive cross-border payments”. CPMI is the international standard-setting body that addresses the safety and efficiency of payments. Tasked by the G20 finance ministers and central bank governors, CPMI is working with the Financial Stability Board to develop a roadmap to improve cross-border payments.
There were over 2,400 registrants, made up of market participants, authorities and academics, to hear about research and policy analysis in the field of cross-border payments. Panellists and speakers included the Federal Reserve chairman Jerome Powel, and leaders from the industry and beyond such as current and former CEO of SWIFT.
Professor Wang spoke on the emerging network of central bank digital currency (CBDC) and its implications for international financial system. The CBDC network is likely to be a decentralized network given the varying positions and capacities of different states and a lack of a consistent, fully-developed position on CBDC across states. The effects of the CBDC network are likely to include policy diffusion (uncoordinated interdependence with policies in one state affected by policies of other states), cooperation, and conflict. CBDC may address some barriers to enhancing efficiency, but new barriers may arise in the case of clusters. It will be crucial to address conflicts, avoid a race to the bottom, and design rules with foresight.
Professor Wang’s research may be found at ResearchGate, SSRN, Twitter @HengWANG_law, and LinkedIn.