Privacy Provision, Payment Latency, and Role of Collateral

By Charles M. Kahn, Caitlin Long, Manmohan Singh

July 31, 2020

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Charles M. Kahn, Caitlin Long, and Manmohan Singh. Privacy Provision, Payment Latency, and Role of Collateral, (USA: International Monetary Fund, 2020) accessed September 19, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The new boundary between publicly and privately provided payments systems and the role of collateral may be changing. Recent technological developments have made it feasible for markets and policymakers to contemplate abolishing physical cash, and replacing it with electronic alternatives like digital tokens. This paper focuses on two concepts: (i) privacy provision that results in increased awareness of and concern with problems of privacy in payments systems; and (ii) payment latency, and how the new fintech world is likely to result in reduced counterparty and interest rate risk for corporate treasurer. The paper ties these issues from the lens of collateral, especially the analogy of collateral reuse and digital tokens.

Subject: Bank deposits, Banking, Central Bank digital currencies, Collateral, Currencies, Financial institutions, Financial markets, Financial services, Money, Payment systems, Technology

Keywords: Bank deposits, Central Bank digital currencies, Collateral, Collateral reuse, Currencies, Digitial tokens, Global, Latency cost, Payment arrangement, Payment latency, Payment settle, Payment solution, Payment system, Payment systems, Payments medium, Payments provider, Payment-system user, Privacy provision, Status quo payment system, WP

Publication Details

Pages:

11
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/148
Stock No:

WPIEA2020148
ISBN:

9781513551944
ISSN:

1018-5941

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