G20 TechSprint identifies 21 proposals for cleaner financing

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The cause of promoting smooth cross-border finance, minimising the menace of illicit finance and pushing central bank digital currencies might receive a major push in the near future with as many as 21 innovative proposals being shortlisted following G20 TechSprint finals in Mumbai, Reserve Bank of India governor Shaktikanta Das said on September 4. The G20 TechSprint is a long-form hackathon that is organised on a global scale by the innovation hub of the Bank for International Settlements (BIS). It is organised every year in association with the G20 president nation. India took over that responsibility on December 1 last year and it would continue till November 30, 2023. Brazil and South Africa would take over the baton from India in the next two years respectively. “In collaboration with the Bank for International Settlements (BIS), 21 proposals in total were shortlisted… they have the powers to provide solutions to maintain the integrity of the financial system, empower the underserved, reduce friction in cross-border payments and amplify the resilience of the financial systems,” the RBI governor remarked at the finals held in Mumbai. He pointed out that the scourge of illicit finance, technology solutions for multi-lateral cross-border central bank digital currency payment platforms and forex and tech solutions for currency settlement were identified for the hackathon to find solutions for this year. Shaktikanta Das claimed that central digital bank currencies can make a lot of difference in the future. An interoperable appropriate technology platform can contribute a lot to push this cause, he commented. Elaborating on the extent of dirty money, Das said, “Estimates from the United Nations Office on Drugs and Crime place global money laundering at 2-5% of global GDP, which is about $800 billion to $2 trillion. Other estimates place this closer to $3 trillion, of which, an estimated 3 billion per annum is successfully intercepted. A very small percentage of 0.1%,” remarked Das. The RBI governor said that if local currencies could be used to settle cross-border payments, it could help protect emerging markets from global shocks. Exchange rate swings, which can and do roil emerging markets regularly, could also be lessened. One way of promoting local-currency platforms was to develop multilateral payment platforms that co-opt multiple currencies, he said.