The need for balance between upgrading existing payment infrastructures and adopting new technologies was highlighted by the Deputy Governor of the Bank of Greece Christina Papakonstantinou, speaking on the panel “Improving cross-border payments in a changing geopolitical landscape,” as part of the 10th Conference of Mediterranean Central Banks organized by Banco de España.
As she noted, the choice between improving existing infrastructures and developing new solutions should take into account users’ needs, the weaknesses of existing systems, the benefits of each alternative, and the available resources.
Ms. Papakonstantinou referred specifically to TIPS, the TARGET Instant Payment Settlement Service, as an example of a targeted upgrade of existing infrastructure that can significantly improve cross-border payments. She stressed, however, that the scope for continuous improvement of existing systems is not unlimited and that in some cases new technological solutions are required.
According to the Deputy Governor of the BoG, the active participation of central banks in the development of new solutions is critical so that financial stability, monetary sovereignty, competition, inclusion, and security are ensured in emerging infrastructures.
In the same context, she underlined the importance of interoperability, common standards, cross-border cooperation, and infrastructures that can support different technological solutions.
The Appia initiative
Ms. Papakonstantinou noted that the Eurosystem’s goal is to promote innovation in a way that safeguards efficiency, resilience, strategic autonomy, and the role of central bank money.
A characteristic example is the Eurosystem’s Appia initiative, which examines how distributed ledger technology (DLT), tokenisation and central bank money can coexist in a future European financial ecosystem.
“Instead of settling for solutions designed elsewhere, Europe is taking an active role in shaping them,” she said, noting that the Appia initiative emphasizes interoperability, common standards, and interconnection, rather than isolation and fragmentation.
The ultimate goal, as she stated, is the design of payment ecosystems with high interconnection, but at the same time sufficient resilience against external disruptions, geopolitical developments, and technological dependencies.
The role of international cooperation
She also made special reference to the role of international forums, which, as she said, can contribute to building trust among authorities, promoting common standards, and linking innovation with cooperation.
As she stressed, payment networks become more efficient and resilient when they are based on common rules, message formats, and governance principles. Interoperability, she added, constitutes a “strategic safeguard” against the fragmentation of payment systems.
International cooperation is also necessary to strengthen trust in new technologies, such as instant payments, tokenisation, and potentially central bank digital currencies. Their use, according to Ms. Papakonstantinou, presupposes trust in the legal, operational, and governance framework.
Finally, she referred to the progress that has been made through the G20 Roadmap, with the contribution of the Financial Stability Board and the Committee on Payments and Market Infrastructures (CPMI), underlining that substantial improvements are feasible when authorities cooperate on common priorities, such as interoperability, common data standards, and the harmonization of the regulatory framework.