The ability of digital currencies to transfer funds directly from one party to another on a peer-to-peer basis should remove the traditional role of the correspondent bank as both the provider of a service and an enabler of payments in the settlement process.
According to a BNY Mellon report ‘Innovation in payments – a spotlight on digital currencies’ published earlier this year, however, not every counterparty will be a direct participant of a P2P system, and the correspondent banking model is more likely to pivot to banks becoming a gateway to a P2P system.
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