CLS continues to support this global initiative, which seeks to address challenges in the wholesale, retail and remittances market segments. In the wholesale space, the mitigation of FX settlement must remain a priority as the Roadmap transitions into its second phase.    

The Roadmap Building Block 9 report, Facilitating Increased Adoption of Payment Versus Payment (PvP), published earlier this year, acknowledges that existing PvP arrangements have successfully reduced settlement risk for much of the FX market, but certain segments remain at risk, namely, emerging market (EM) currencies. 

CLS has been exploring several ways to expand PvP coverage, including an alternative PvP service for EM currencies. However, progress in this area must overcome regulatory and geopolitical challenges, and it will require public and private sector stakeholders to closely collaborate over multiple years to arrive at an industry solution. For now, CLS is focusing on growing CLSNet, its standardized, automated bilateral payment netting calculation service for over 120 currencies, which helps to address some of the settlement and operational risks associated with emerging market currencies.

We address these issues in our latest whitepaper, The G20 cross-border roadmap: Navigating the FX lane, emphasize that a strong public-private partnership is critical to finding new solutions for EM currencies with rising FX market shares.