State Bank of Pakistan to centralize cross-border payments at Treasury level effective 1 October

The State Bank of Pakistan (SBP) has officially confirmed that, starting on 1 October 2022, it will centralize all cross-border payments at its Treasury Operations Department in an effort to further streamline these transactions.

Reports indicate that the SBP, the Banking Services Corporation and the Karachi Office currently handle payments for the banks related to the Asian Clearing Union (ACU), Cash Reserve Requirements (CRR) and Special Cash Reserve Requirements (SCRR), as well as deposits and withdrawals from local US Dollar instrument collection and settlement (SBP BSC - KO).

State Bank has now elected to re-engineer its business process by centralizing all cross-border payments, including ACU, CRR, SCRR, and deposits or withdrawals from local US Dollar instrument collection and settlement, at the Treasury Operations Department-SBP in order to align cross-border payments with international best practices. All banks, including all Islamic banks in FX, have been advised by the SBP to ensure compliance with new directives beginning on 1 October.

NYSE and TSE join forces to facilitate cross-border investment between the US and Japan

The New York Stock Exchange, a subsidiary of Intercontinental Exchange, Inc., and the Tokyo Stock Exchange, Inc., have reportedly collaborated to support cross-border investment between the United States and Japan through product development, marketing and information sharing. Reports indicate that a memorandum was signed by the two exchanges during Japanese Prime Minister Fumio Kishida's visit to the NYSE.

The two exchanges stated that the decision to advance their partnership is aimed at promoting and supporting the growth of both their businesses, driven by the expanding role of capital markets and the changing business environment that includes breakthroughs in digitalization.

As Japan’s public and private sectors continue to collaborate towards a “New Form of Capitalism”, Hiromi Yamaji, President & CEO, Tokyo Stock Exchange, expects that this agreement will help improve the investment climate and financial sector. As a fundamental capital market infrastructure, the Japan Exchange Group and TSE plan to contribute towards further developments of capital markets in both Japan and the US through this partnership with the NYSE.

The US and Japanese stock exchanges plan to collaborate in three specific areas in order to further stimulate cross-border investment between the two nations and develop their capital markets. The development of investment products is reportedly the main focus of the agreement, followed by marketing initiatives aimed at American and Japanese investors, as well as information sharing on sustainability, the use of digital technologies and market operations.

Fondy to provide digital IBAN accounts to merchant customers via ClearBank integration

ClearBank, a provider of accounts, real-time clearing, and embedded banking for financial institutions, has partnered with Fondy, a one-stop payment platform, to provide e-commerce businesses with an efficient and simplified payment solution. This solution will reportedly enable businesses to manage and control their cash flow, from payment acceptance to international bank account number (IBAN) accounts and pay-outs to third parties.

Fondy's new and existing merchant customers can expect to have access to virtual IBAN accounts as well as the Great Britain Pound (GBP) payments networks (Faster Payments, CHAPS and Bacs) via the ClearBank integration. In addition, new product opportunities such as multi-currency business accounts will be supported. Reports indicate that with better access to international payment networks in multiple currencies, businesses can expect to generate additional cash flow from digital sales.

According to Valeria Vahorovska, Founder and CEO, Fondy, the partnership enables the company to advance the integration of a multi-currency solution for their merchants, helping them achieve their goals quickly by streamlining cash management and money movement for multiple currencies. Using Fondy Flow IBAN accounts, clients can expect to access multiple payment networks worldwide in different currencies and receive same-day funds while improving their cash flow from digital sales.

As the regulatory landscape continues to shift, smaller financial services firms can benefit from major firms’ support in the market, according to Charles McManus, CEO, ClearBank.

Frictionless merchant payments using UPI-enabled QR codes via TerraPay and NPCI International alliance

TerraPay, a UK-based global payments infrastructure firm, has partnered with NPCI International Payments Limited (NIPL), an international branch of National Payments Corporation of India (NPCI), to help boost its cross-border payment solutions.

The collaboration is aimed at enabling customers and merchants in India who have an active Unified Payments Interface ID (UPI ID) to seamlessly initiate and receive cross-border payments by leveraging TerraPay's flexible platform and the UPI network. The two companies plan to further enable Indian customers with active UPI IDs (350 million bank accounts) to conduct transactions at TerraPay-enabled QR locations worldwide.

Both organizations aim to strengthen UPI payments and QR solutions in order to realize their full potential. The collaboration expands the use of UPI and QR for cross-border merchant payments. Reports indicate that this venture will increase the use of UPI apps across different geographies. UPI payments and QR transactions reportedly add a non-repudiation element because they are customer-initiated with two-factor authentication, which significantly minimizes complaints and dispute settlement issues.

Iran to expedite CBDC pilot program after foreign trade transaction in crypto

Iran plans to launch a central bank digital currency (CBDC) pilot program before the end of 2022, following the country’s shift towards monetary tokenization and application for BRICS (Brazil, Russia, India, China and South Africa) membership, a rival economic union, which accounts for 40% of the globe’s total population. Reports suggest that Iran’s economic digitization is in preparation for this.

Iran's crypto-rial aims to provide configurable and flexible funds that can be easily applied to potential supply chain management projects. Reports indicate that the requirement for human intervention can be greatly reduced if the program is followed by a decrease in physical bank notes.

Based on the country's historical opposition to cryptocurrencies, reports state that this move is merely a transitional step towards enabling businesses with the capability to pay for imports in cryptocurrencies, enhancing the utilization of digital assets.

If a crypto-rial is fully deployed, it will become simpler to establish new rules, such as exchanging regular cryptocurrencies for crypto-rial, as it is expected to become the country's sole means of payment. Furthermore, reports indicate that if the dollar's use declines on a global stage diminished by BRICS, crypto-rial could potentially be easily exchanged for a digital rupee or digital yuan.

Nepal to propose trade in national currencies with Russia

Nepal's ambassador to Russia, Milan Raj Tuladhar, stated that Moscow and Kathmandu, the most populous city and capital of Nepal, plan to establish a system for exchanging payments in their respective national currencies.

Tuladhar expects the system to be a barter trade based solely on the two country’s currencies, without the participation from outside groups. Furthermore, Nepal aims to purchase Russian fertilizers and technical equipment (as Nepal works heavily in the agricultural industry) in exchange for increased exports of tea and leather product to Russia.

The volume of trade between Nepal and Russia is reportedly minimal currently. However, with direct flights and additional exchanges between Russia and Nepal, more opportunities may arise. Additionally, while China and India, Nepal's immediate neighbours, account for the majority of its trade, Kathmandu is reportedly eager to diversify its trade with more nations in Eurasia. According to reports, Russia has been eager to abandon the dollar and euro in trade settlements to work towards more consistent trades. Reports indicate that it has promoted the idea among its trading partners. For instance, India publicized last week that it will soon begin trading in rupees with Russia, subsequent to the State Bank of India agreeing to facilitate a payment mechanism.

As a result of Russia’s high volume of yuan payments last month, Russia ranked third among all non-Chinese nations as a market for the currency. Additionally, the Russian ruble was added as a currency for bilateral trade, including Russian natural gas supplies, subsequent to an economic cooperation agreement signed by Turkey and Russia in August.