Fit-for-Purpose Payment System Interoperability: A Framework

Jorge Herrada and Angela Lawson
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Angela Lawson: https://www.minneapolisfed.org/people/angela-lawson

No 2022-07-14-2, FEDS Notes from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Payment systems, and interoperation within and between them, are complicated, making analysis and dialogue among analysts, technologists, and members of the public challenging. Given the emergence of new payment mechanisms, like CBDC and private digital currency, these discussions are increasingly important to identify opportunities and challenges. This paper proposes a four-step framework and provides several tools policy analysts, technologists, and interested members of the public can use to interpret and discuss payment system interoperation. First, we provide an overview of payment system interoperation and why it is important. Next, we describe our four-step framework. Then, we apply the framework by describing the potential results of a hypothetical fit-for-purpose interoperation discussion where both a hypothetical central bank digital currency (CBDC) and stablecoins, a type of private digital currency, could co-exist in a payment system.

Date: 2022-07-14
New Economics Papers: this item is included in nep-mon, nep-pay and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfn:2022-07-14-2

DOI: 10.17016/2380-7172.3136

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