The International Monetary Fund has published a fintech note assessing how central bank digital currencies and similar digital payment innovations could affect cross-border payment costs and volumes in the short term. Under an illustrative scenario assuming a 60 percent reduction in transaction costs, total savings would reach about USD 510 billion, equivalent to 0.3 percent of cross-border flows or 0.5 percent of global GDP. Transaction volumes would rise by an estimated USD 5.8 trillion, or 3 percent, with the global effect constrained by the wholesale segment’s already low costs. The largest relative benefits would accrue to remittances and countries that rely heavily on expensive corridors. Remittance savings would total about USD 17 billion, or 3.7 percent of flows, while corridor-level estimates indicate increases of up to about 5 percent of GDP in some recipient countries, including Lesotho, Lebanon and Tonga. The estimates cover the short-term intensive margin and remain uncertain because of limited cross-border transaction and cost data, particularly for wholesale payments. The note calls for further analysis using actual data from central bank digital currency initiatives and other digital payment innovations.
2025-02-07International Monetary Fund
International Monetary Fund models potential 60 percent digital money cost reduction for cross-border payments
The International Monetary Fund estimates that a 60 percent digital money-driven reduction in cross-border payment costs could save USD 510 billion and increase flows by USD 5.8 trillion. The largest relative gains would accrue to remittances and countries dependent on high-cost corridors. The short-term scenario is subject to substantial data limitations.