Governing Global Digital Financing Platforms

The Task Force recommends developing inclusive governance for global digital financing platforms: 

Digitalization creates the potential for increases in returns to scale, and so supports the emergence of monopolies. Some digital financing platforms may become globally significant, as is the case with prominent payment platforms. This could also be the case with global digital currencies. Such platforms would have significant cross-border spill-over impacts. Some impacts are beneficial and planned for, such as reduced cross-border transaction costs. Others might be problematic and not adequately factored into current policy and regulation, such as monetary policy and macro-economic effects.

Developing country participation and voice in the rule setting and standards development processes regarding the governance of digital finance is critical. A number of platforms have mandates to engage global standard setters on behalf of developing countries exist and should be leveraged on. The Intergovernmental Group of Twenty-Four is mandated by its developing country Finance Ministry and Central Bank membership to contribute developing country perspectives into G20 and other international processes. The Alliance for Financial Inclusion is mandated by its membership of developing country central banks, financial regulators, and government ministries from more than 90 countries to represent experiences and challenges of its membership in international fora such as the G20 as well as through formal representation at standard setting bodies such as the Financial Action Task Force (FATF) and Bank for International Settlements (BIS). The World Bank also plays a supporting role in advocating for the perspectives of developing countries and their citizens in international standard setting bodies, for example through Enhanced Cooperation Arrangements with the BIS.

Overview of this Recommendation

Element

Icon ImageInclusive Rule-Setting

Recommendation

Ensure a more effective, permanent voice of developing countries in the development of governance of digital financing, particularly pertaining to global digital finance platforms that will have cross-border spill-over impacts.

Next steps

Establish a platform led by developing country policymakers and regulators to engage with international rule and standard-setting bodies shaping the next generation of governance of global digital financing actors. It should leverage existing platforms for developing country engagement with standard setters and include finance, telecommunications, competition, tax and data regulators.

 

The Task Force recommends developing inclusive governance for global digital financing platforms: 

Digitalization creates the potential for increases in returns to scale, and so supports the emergence of monopolies. Some digital financing platforms may become globally significant, as is the case with prominent payment platforms. This could also be the case with global digital currencies. Such platforms would have significant cross-border spill-over impacts. Some impacts are beneficial and planned for, such as reduced cross-border transaction costs. Others might be problematic and not adequately factored into current policy and regulation, such as monetary policy and macro-economic effects.

Developing country participation and voice in the rule setting and standards development processes regarding the governance of digital finance is critical. A number of platforms have mandates to engage global standard setters on behalf of developing countries exist and should be leveraged on. The Intergovernmental Group of Twenty-Four is mandated by its developing country Finance Ministry and Central Bank membership to contribute developing country perspectives into G20 and other international processes. The Alliance for Financial Inclusion is mandated by its membership of developing country central banks, financial regulators, and government ministries from more than 90 countries to represent experiences and challenges of its membership in international fora such as the G20 as well as through formal representation at standard setting bodies such as the Financial Action Task Force (FATF) and Bank for International Settlements (BIS). The World Bank also plays a supporting role in advocating for the perspectives of developing countries and their citizens in international standard setting bodies, for example through Enhanced Cooperation Arrangements with the BIS.

Overview of this Recommendation

Element

Icon ImageInclusive Rule-Setting

Recommendation

Ensure a more effective, permanent voice of developing countries in the development of governance of digital financing, particularly pertaining to global digital finance platforms that will have cross-border spill-over impacts.

Next steps

Establish a platform led by developing country policymakers and regulators to engage with international rule and standard-setting bodies shaping the next generation of governance of global digital financing actors. It should leverage existing platforms for developing country engagement with standard setters and include finance, telecommunications, competition, tax and data regulators.