The Reserve Bank of India (RBI) and Bank for International Settlements (BIS) Innovation Hub have launched a global hackathon focused on developing new solutions to improve cross-border payments.
The competition is part of India’s G20 presidency and 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 central bank digital currencies – 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).
A hackathon is an event during which participants, typically coders and developers, design and present innovative solutions to a particular challenge.
For this TechSprint, India’s central bank and the BIS have 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 CBDC platforms.
“There is a need to explore solutions to improve efficiency in the cross-border payments space,” said RBI deputy governor T Rabi Sankar, launching the hackathon this week (4 May). “The time is opportune for innovative tech-based solutions facilitated through standardised protocols and arrangements among nations to solve this problem. There have been increased efforts from RBI, but such efforts need to be expanded and scaled up. When payments across borders become efficient, economic linkages, economic co-operation and economic activities across borders become easier, effective and efficient.”
FSB cross-border payments priorities
India’s G20 presidency – which is running under the slogan ‘One Earth, One Family, One Future’ – kicked off in December 2022 and will run to 30 November 2023. Its ‘finance track’ discusses global macroeconomic issues through its meetings of finance ministers and central bank governors, their deputies and working group meetings.
The Financial Stability Board (FSB) announced almost seven months ago the next steps and priorities for the ‘G20 Roadmap for Enhancing Cross-Border Payments’, two years after the influential plan was launched. Work related to the roadmap had reached an ‘inflection point’ and ‘needs to move to practical projects’, the FSB stated. The FSB detailed priority actions via a report delivered to G20 finance ministers and central bank governors for a meeting on 24‑25 February 2023.
The BIS Innovation Hub’s third annual work programme (for 2023), meanwhile, includes increased focus on improving payments systems. Ongoing cross-border projects include ‘Project Nexus’, which recently progressed to its next stage.
“While preserving financial integrity, payments should be able to flow seamlessly across borders and between payment systems to promote competition,” said BIS Innovation Hub head Cecilia Skingsley (who was included in Global Government Fintech’s ’23 people to watch in 2023’) this week. “The BIS Innovation Hub has been working closely with our global membership to experiment with different innovative solutions to improve many of its known issues. By leveraging the important work of the G20 cross-border payments programme, this TechSprint will make an important contribution to this effort, which ultimately aims to improve people’s lives all over the world.”
An in-person panel discussion was held to launch the hackathon and discuss its challenge areas. Broadcast live online, speakers included RBI Innovation Hub chief executive Rajesh Bansal (who was also included in Global Government Fintech’s ‘23 people to watch in 2023’) and BIS Innovation Hub Hong Kong centre head Bénédicte Nolens. The discussion was introduced by assistant general manager Ankur Singh from India’s central bank’s fintech department.
Proposals to address one (or more) of the problem statements must be submitted by 4 June. They will then be reviewed by experts and the organisers, with shortlisted teams announced on 30 June. Shortlisted teams will then be invited to develop their solutions over a six-week period, with each team eligible for a stipend of INR 800,000 (about $10,000/£7,790).
Shortlisted solutions would then be further developed and submitted for evaluation on a platform called APIX by 15 August (APIX, which stands for API Exchange, is operated by a Singapore-headquartered fintech company called Synfindo). The most promising solution to each problem statement will be announced as winners in early September, each receiving a prize of INR 4,000,000 (about $50,000/£39,000).
The winners of last year’s CBDC-focused G20 TechSprint were two teams from Singapore and one team from the US. Teams were invited to develop solutions in three areas: issuing, distributing and transferring CBDCs; using CBDCs to help with financial inclusion; and using CBDCs to improve interoperability between countries’ payments systems.
An 11-strong expert panel convened by Bank Indonesia picked Dragonfly Fintech Pte Ltd (from Singapore), Bitt-IDEMIA (from the US) and Partior (from Singapore) as respective category winners. 21 teams representing companies ranging from global corporations to fintechs were shortlisted from 99 entries.
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