International payment systems do not operate under a single global central bank. To move funds across borders, commercial banks must connect through a legacy network of bilateral agreements known as Correspondent Banking.

A cross-border wire often routes through multiple intermediary banks before reaching its destination, creating multi-day processing delays, tracking gaps, and high transactional fees:

[Sending Bank Alpha] ---> Home Correspondent Bank ---> Intermediary Clearing Hub ---> Host Correspondent Bank ---> [Receiving Bank Beta]

This structural complexity requires participant banks to hold liquid deposits in accounts abroad (Nostro and Vostro Accounts) to facilitate settlements across different jurisdictions, increasing capital deployment overheads.