De-centralized cross border payments for global economic status quo

Abstract

The recent Russia-Ukraine war crisis and the subsequent economic sanctions imposed by the US via a restriction on the SWIFT payment system have highlighted the increased reliance of global economies on a single message service for international trade. This, along with high inflation in the US and falling global economies world-wide and the struggle of the USD to maintain its dominance is bringing about a concept of dedollarisation, where economies are trying to have their reserves in alternate currencies and have global trade in other currencies of choice. This paper discusses about a Globally Backed Stablecoin (GBS) that envelopes the benefits of blockchain and tries to overcome the negatives of Central Bank Digital Currency (CBDC) as an answer to the future of global trade where it becomes difficult to influence its value or usage by few participants and gives better transparency in the global trade. This is another step to ensure that economies are not held hostage by sanctions or threats and unlike the US Dollar or SWIFT systems, payment systems cannot be used as a weapon for economic wars.