US Fed Official Raises Concerns Over Speeding Up Cross-Border Payments

In light of recent remarks by RBI Governor Shaktikanta Das advocating for more efficient trans-border transactions, US Fed's Christopher J Waller has expressed concerns over the potential risks of speeding up cross-border payments. Waller emphasizes the importance of certain frictions to prevent money laundering and terrorism financing.

Days after RBI Governor Shaktikanta Das emphasized the need for greater efficiency in trans-border transactions, Christopher J Waller, a senior Federal Reserve official, voiced concerns over the potential risks of frictionless cross-border payments.

Speaking at the Global Fintech Fest 2024, Waller noted, 'Not all frictions that slow payments down are bad.' He pointed out that slowing down transactions can help prevent money laundering and terrorism financing, an essential safeguard for banks.

Waller also underscored various challenges associated with speeding up payments, including increased risk-management burdens. 'There is no silver bullet that increases speed and efficiency without tradeoffs,' he said, emphasizing the need for careful consideration of legal, compliance, and operational factors.

(With inputs from agencies.)