Learning Objectives:

  • Understand the roles of central banks, regulators, and market infrastructures.

  • Apply international standards: CPMI-IOSCO Principles for Financial Market Infrastructures (PFMI).

  • Identify emerging payment models and their oversight challenges.

7.1 The Regulatory Landscape

The Uphilos Consultancy course covers “Explain the roles of central banks, regulators, and market infrastructures in the payments ecosystem” . The IBS programme aims to “provide an in-depth understanding of the regulatory frameworks and standards governing the digital payments industry, both nationally and internationally” .

Key Regulatory Frameworks:

  • CPMI-IOSCO PFMI: Principles for Financial Market Infrastructures, international standards for systemically important payment systems.

  • PSD2 (Europe): Payment Services Directive 2, governing payment services and open banking.

  • RBI Guidelines (India): Regulatory framework for payment systems in India.

  • Federal Reserve Regulations (US): Oversight of payment systems by the Federal Reserve.

7.2 Central Bank Roles and Oversight Mandates

The Uphilos Consultancy course covers “Clarify why central banks oversee payment systems, focusing on safety, efficiency, competition, and inclusion” .

Central Bank Functions:

  • Overseer: To promote efficiency and soundness.

  • Supervisor: To maintain integrity and confidence in the system.

  • Facilitator of Settlement: By providing settlement accounts to commercial banks.

  • Provider: Operating key systems like RTGS.

  • User: For their own transactions.

  • Provider of Liquidity: To facilitate efficient settlement.

  • Catalyst/Collaborator: Spurring change and providing a platform for dialogue.

7.3 Emerging Payment Models and Oversight Challenges

The Uphilos Consultancy course covers “Identify oversight issues arising from big-tech platforms and cross-border digital payment providers” .

Oversight Challenges:

  • Big-Tech Platforms: The entry of large technology companies into payments raises competition and stability concerns.

  • Stablecoins and Crypto-Assets: Need for regulation of stablecoins and crypto-assets.

  • Cross-Border Digital Payment Providers: Jurisdictional challenges in regulating cross-border payment providers.

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