JPMorgan believes that CBDC will help companies save $120 billion a year

The Investment Bank has released a report on the impact of CBDC on international payments

04.11.2021 - 08:30

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What's new? JPMorgan investment bank and Oliver Wyman consulting company have published a report on the impact of central banks' digital currencies (CBDC) on international payments.

Link to the report

What conclusions did the analysts come to? The report says that the annual volume of international payments is $23,5 trillion, or 25% of global GDP. At the same time, bank transfer fees reached $120 billion in 2020. Companies also lose money on currency exchange and lose access to funds blocked on their accounts.

How can CBDC help corporations? The report’s authors believe that the development of CBDC will provide companies with the opportunity to save $120 billion a year. The experts have presented an optimal model of the CBDC global network, which involves three banks instead of six. In this model, the amount of transaction costs is only $5 - 0,1% of the transaction amount, and the loss on currency exchange is half as much as $44.

As a result, reducing the number of correspondent banks in CBDC operations can reduce the cost of making payments by 80% namely from $120 billion to $20 billion. Companies will not need to keep as much liquidity in their accounts, so about $10 billion more will be released.

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