Innovation and evolution in payments and the role of central banks

The payments landscape is changing rapidly, driven by new and evolving technology, non-traditional players and new payment instruments entering the market. At the same time, central banks’ core objectives and functions – financial stability, monetary policy, banking supervision and access to financial services – haven’t changed. Against this backdrop, central banks are evaluating and/or deploying new digital settlement solutions, including faster payments systems and central bank digital currencies. In a recent OMFIF Digital Monetary Institute roundtable, participants explored these key questions around the respective role of central banks and the private sector in the innovation and evolution of payments.

The resilience, inventiveness and adaptability of digital payments have been some of the very few positive features to have emerged from the global health crisis. ‘Digital payments have done some amazing things over the last year’, said Charlotte Hogg, chief executive officer of Visa Europe. As she pointed out, had the world been presented with a crisis of similar magnitude 10 years ago, the outcome would have been very different for households unable to access or pay for the items they needed to survive a series of lockdowns. The fact that so many consumers were able to take the provision of these basic services for granted speaks volumes for how far digital payments have come over the last decade.

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