Barr: Fed backs cross-border harmonization efforts

The Federal Reserve supports international efforts to make cross-border payments faster, cheaper, more transparent, and more accessible globally, Fed Vice Chair for Supervision Michael Barr said.

BIS Framework: Barr’s remarks follow this month’s Bank for International Settlements release of a final framework on ISO 20022 harmonization requirements for enhancing cross-border payments. The framework is designed to establish a consistent minimum set of messaging data for more efficient cross-border payments given that most of the world's payment systems are adopting the ISO 20022 messaging standard by 2025.

Outlook: Barr—who also reiterated his support for regulating stablecoins and repeated that the Fed has not made any decisions on issuing a U.S. central bank digital currency—said his agency will continue engaging stakeholders on cross-border payments.

ICBA View: In a comment letter to the panel earlier this year, ICBA said policy setters should ensure the plan does not lead to more complexities for community banks, which would harm their ability to support faster and more transparent cross-border transactions.

Background: The Fed last year announced the final timeline for migrating the Fedwire Funds Service to the ISO 20022 message format by March 10, 2025—delaying its November 2023 implementation date, as advocated by ICBA. Launched in 2004, ISO 20022 has become the de facto global standard for faster payment initiatives.