Tokenisation in cross-border payments: Evaluating the regulatory, policy and technology trajectory
Abstract
This paper examines whether central bank digital currencies, regulated stablecoins and other forms of tokenised money can actually achieve the G20 Roadmap’s aims of making cross-border payments faster, cheaper, more transparent and more inclusive. The central question is whether tokenisation improves the entire payment process or simply adds another technical rail to the existing system. To answer this question, the paper defines ‘delivery’ in operational terms, such as faster straight-through processing, the reduction of errors, fewer manual interventions, quicker crediting of funds, more predictable investigations, better intraday liquidity management, and clearer fees and foreign-exchange (FX) outcomes. Using this definition, the paper evaluates how tokenised instruments might impact on end-to-end performance. The analysis shows that tokenisation can enhance the ‘middle mile’ of payments by allowing shared, machine-readable information about the instrument and its life cycle. This reduces reconciliation work and makes it easier to coordinate payment and FX steps across institutions and time zones. These advantages matter most in cross-border settings, where timing, compliance checks and FX pricing must align. The paper finds that the most significant constraints are institutional and regulatory, rather than technical. To show how viable operating models are being shaped, the paper reviews recent regulatory developments in both the EU (MiCAR and digital euro proposals) and the USA (Executive Orders 14067 and 14178, the GENIUS Act). The paper concludes that progress will likely be corridor- and use-case-specific: a hybrid model in which tokenised instruments improve targeted flows, while most high-volume cross-border money movement continues to depend on regulated gateways, domestic rails and familiar supervisory expectations. This article is also included in the Business & Management Collection which can be accessed at http://hstalks.com/business.
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Author's Biography
Bernardo Correia Barradas is an executive director at J.P. Morgan Payments. He works in the Global Payments Advocacy team, covering regulatory trends and developments with a focus on Europe, the Middle East and Africa, as well as globally. Over the previous decade, Bernardo served as a senior legal expert at the World Bank Group, where he covered a wide range of topics, including improvements in instant payments and cross-border transactions in developing countries and the expansion of the Single Euro Payments Area to the Western Balkans.
Katja Lehr is a managing director for J.P. Morgan Payments. She is Europe Product Head and EMEA Payments Industry and Advocacy Lead, and is responsible for product offerings across the regional footprint, as well as for industry outreach and advocacy. She has extensive experience in global payments, trade and strategy, having held roles at PayPal, the International Financial Services Association, SWIFT and Dresdner Bank. Lehr holds a diploma as a Professional of Banking and a diploma in Financial Economy.
