The foreign exchange flux: Liquidity optimisation in view of instant settlement and stablecoins
Abstract
The global wholesale foreign exchange (FX) regime constitutes the world’s largest financial market. The key to its continuing growth and success lies in its ability to adapt to change while ensuring effective settlement risk mitigation and efficient liquidity optimisation arrangements like netting that are crucial to the smooth turnover of US$9.5tn daily. This paper explores several of the current transformative trends taking hold in the FX market, such as emerging technologies and new business needs. This paper also examines their potential impact and some of the challenges they face, with a particular focus on liquidity optimisation. This article is also included in the Business & Management Collection which can be accessed at http://hstalks/business.
The full article is available to subscribers to the journal.
Author's Biography
Dirk Bullmann is Global Head of Public Policy for CLS, where he is responsible for formulating, developing, and implementing global public policy strategy. He represents CLS in all policymaker engagement and leads the organisation’s innovation related research. Before joining CLS, Dirk spent more than 20 years at the European Central Bank (ECB). He led the ECB’s innovation team and the innovation lab in the Directorate General Market Infrastructure and Payments, and coordinated innovation activities across the euro area central banks. He also served as Adviser to the ECB’s Chief Services Officer, Adviser to the Director General Market Infrastructure and Payments, and Secretary to the Eurosystem Payment and Settlement Systems Committee.
Sophie Dalzell joined CLS in 2023 as a Public Policy and Innovation Specialist. She works to engage on all aspects of CLS’s innovationrelated research activities with both the industry and policy makers, with a particular focus on distributed ledger technologies, central bank digital currencies, and artificial intelligence. Sophie joined CLS from the Bank of England, where she spent three years working on payments innovation policy. Prior to this, she worked for a private sector consultancy that specialised in payments sector regulation.
