G20 TechSprint 2023 on cross-border payments winners revealed

Two UK-based teams and one team from the US have been judged the winners the G20 TechSprint 2023 during an event in Mumbai.

Organised by the Bank for International Settlements (BIS) and Reserve Bank of India (RBI) – the central bank of the country currently holding the rotating G20 presidency – the TechSprint was launched in May to promote innovative solutions aimed at improving cross-border payments.

The Switzerland-headquartered BIS and India’s central bank invited teams to develop technology solutions related to cross-border payments in three areas: to reduce illicit finance risk around anti-money laundering (AML)/countering the financing of terrorism (CFT) and sanctions; foreign exchange and liquidity technology solutions to enable settlement in emerging market and developing economy currencies; and multilateral cross-border central bank digital currency (CBDC) platforms.

‘Team Secretarium’ (from the UK), ‘Team Millicient Labs’ (UK) and ‘Team Knox Networks’ (US) were voted as winners for each of the respective ‘problem statements’ after 21 shortlisted teams presented prototypes to a judging panel convened by the RBI in the city in which the central bank is headquartered. Each winning team received a cheque worth INR 4,000,000 (about $48,000/£38,000).

The competition is the fourth ‘G20 TechSprint’ after previous versions were co-organised by the BIS alongside Bank Indonesia (for Indonesia’s G20 presidency in 2022 and focused on CBDCs), Banca d’Italia (for Italy’s G20 presidency in 2021 and focused on green finance) and the Saudi G20 presidency (in 2020, focused on RegTech and SupTech).

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‘Exploring unchartered territories’

Secretarium won the anti-money laundering category with a solution on transaction monitoring and protecting anonymity and privacy using secure privacy technology. The company was also among the winners of a ‘Global Central Bank Digital Currency (CBDC) Challenge’ organised by the Monetary Authority of Singapore (MAS) in 2021.

Millicent Labs won the second category with a hybrid decentralised exchange for CBDCs, which features automated market makers (AMMs) and traditional order books, to optimise liquidity and reduce volatility risk. AMMs enable the exchange and settlement of two or more digital assets to be performed automatically with a smart contract.

New York City-headquartered Knox Networks won the third category with a CBDC solution based on ‘File-Based Digital Assets (FBDAs)’.

BIS Innovation Hub head Cecilia Skingsley – who was included in Global Government Fintech’s ’23 people to watch in 2023’ – said in a BIS press release announcing the G20 TechSprint 2023 winners that the initiative “allows us to push boundaries and explore uncharted territories, with the shared goal of making a positive impact on societies”.

The eight-strong judging panel comprised: National Payments Corporations of India (NPCI) managing director and chief executive Dilip Asbe; Cambridge Centre for Alternative Finance co-founder and executive director Bryan Zheng Zhang; Hong Kong Monetary Authority senior fintech director Yvonne Tsui; Al Etihad Payments chief operating officer Andrew McCormack; International Monetary Fund senior economist André Reslow; World Bank senior financial sector specialist Harish Natarajan; Financial Action Task Force executive secretary Violaine Clerc; and Bank of Thailand deputy director Peerapong Thonnagith.

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‘Multi-dimensional challenges’

The winners were announced at an event on 4 September that featured a panel discussion featuring Skingsley, Clerc, Zheng Zhang and McCormack. The discussion was moderated by Asbe.

“Evidenced by presentations over the past two days [during the judging process], dare I say we need 100s more – if not 1,000s more – solutions to be implemented and prototyped because the world needs more innovative solutions to ensure financial innovation is scalable, sustainable and also inclusive,” Zheng Zhang told the in-person and online audience.

“Also, we need more innovations on the public side to ensure the effective regulation and supervision of digital financial services,” he added.

McCormack, who was head of the BIS Innovation Hub’s Singapore centre before moving to Abu Dhabi-headquartered Al Etihad Payments earlier this year, observed that emerging markets are in many cases at the global forefront of digital money infrastructure-related innovation and rollout, including CBDC development.

In the context of CBDCs specifically he said that “technology is now at a point where you could conceivably put these systems into production”. But he added that “transforming infrastructure, and certainly transforming cross-border infrastructure, is deeply and fundamentally difficult” with challenges being “multi-dimensional… there’s no silver bullet.”

G20 ‘roadmap’ – latest

India’s G20 presidency will run to 30 November 2023, when the baton passes to Brazil.

Ahead of a summit in New Delhi this weekend (9-10 September), Financial Stability Board (FSB) chair Klaas Knot on 5 September wrote to G20 leaders with an update on the G20’s ‘roadmap’ for enhancing cross-border payments. The influential roadmap was launched in October 2020. Targets were published in October 2021, to be achieved by 2027 in most cases. In October 2022 the FSB stated that work had reached an ‘inflection point’ and must ‘moved to practical projects’. The FSB also detailed priority actions via a report delivered to G20 finance ministers and central bank governors ahead of a meeting on 24‑25 February 2023.

The new Knot-signed letter notes a ‘requirement [for] further political support and sustained effort by the public- and private-sectors’ in order to meet the 2027 targets. Examples of specific projects mentioned in the letter include the development of harmonised ISO 20022 data requirements; work in various jurisdictions to link domestic faster payments systems; and ‘the deployment of new tools in the correspondent banking network’.

The FSB will next month (October) submit to G20 finance ministers and central bank governors its first report with data on progress towards the targets alongside an annual report on progress related to individual roadmap actions.

A separate Knot-signed letter sets out work the FSB has undertaken during India’s G20 presidency to address vulnerabilities in the financial system and ‘enhance the resilience of the financial system to structural change’. The FSB delivered to the G20 in July recommendations for the regulation, supervision and oversight both of crypto-assets and markets, and of global stablecoin arrangements.

WATCH
‘G20 TechSprint 2023’ panel discussion (video length: 48min 16sec)

Source: Reserve Bank of India YouTube page