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The Evolution of Cross-border Transactions
- The evolution of cross-border transactions traces back to ancient times when merchants traveled along the Silk Road for direct barter exchanges.
- Hawala system introduced the concept of value transfer without physical currency movement, signifying early innovations in cross-border finance.
- SWIFT's establishment in 1973 revolutionized international transfers by standardizing financial transaction processes across borders.
- Blockchain technology and CBDCs offer transformative potential for streamlining cross-border payments and reducing inefficiencies.
- Challenges in cross-border payments include high costs, low speed, limited access, and regulatory complexities.
- Fragmented regulatory landscapes pose obstacles for financial institutions navigating cross-border transactions and compliance requirements.
- Blockchain enables direct, decentralized value transfers, bypassing traditional banking intermediaries for faster and cheaper international transactions.
- CBDCs aim to enhance cross-border payments by enabling central banks to issue and settle transactions using digital currencies.
- KAIB focuses on blockchain technology, industry collaboration, and advisory services to drive innovation in cross-border payments.
- The strategic approach aims to reduce settlement times, lower costs, increase transparency, and navigate regulatory complexities in global finance.
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