LONDON, March 12 (Reuters) – Andrew Bailey, chair of global risk watchdog the Financial Stability Board (FSB), urged governments in a speech on Thursday to push ahead with reforms to international and domestic payments systems, warning inefficiencies risk fragmenting the global financial system.
Speaking at an FSB payments summit, Bailey – who is also governor of the Bank of England – said progress had been made under a G20-backed roadmap on international payments but implementation remained uneven. “We have some tough challenges ahead,” he added.
Cross-border payments have long been criticised for high costs, slow settlement times and limited transparency, particularly compared with increasingly efficient domestic payment systems.
In October, the FSB said global authorities were set to miss a 2027 target to cut the average cost of cross-border retail payments to no more than 1% and for 75% of wholesale and retail payments to be credited within an hour of being made.
Bailey said frictions in international payments could undermine financial stability and economic growth if left unaddressed.
He also announced work towards a 2027 review of FSB recommendations on data frameworks and supervision.
Efforts to modernise global payments come as the crypto industry intensifies its push for more business-friendly regulation of stablecoins – crypto tokens typically pegged to currencies such as the U.S. dollar – which proponents argue can offer quicker and cheaper cross-border payments.
Stablecoins are already used in parts of emerging markets and international trade to bypass traditional banking rails, though regulators have warned they pose risks to financial stability, consumer protection and monetary sovereignty if inadequately supervised.
(Reporting by Phoebe Seers; Editing by Tommy Reggiori Wilkes, Iain Withers, William Maclean)
