The Architecture of Cross-Border Payments: Blockchain, Governance Frictions, and Hybrid Payment Intermediation

Abstract

Cross-border payments remain essential to global trade, remittances, and international business activity, yet they continue to exhibit persistent frictions in cost, speed, transparency, and operational predictability. While recent innovation has expanded the range of possible cross-border payment architectures, the central issue is no longer whether blockchain or other digital technologies can be applied to payments, but whether alternative architectures materially improve outcomes under real-world institutional, regulatory, and operational constraints.
This dissertation examines three architecture families: correspondent banking and incumbent upgrades, interlinked instant payment systems, and tokenised settlement arrangements. It adopts a pragmatic convergent mixed-methods design. The quantitative strand provides a descriptive public benchmark of architecture-relevant indicators using mixed-level public evidence—including corridor-level, scheme-level, network-level, and jurisdiction-level sources—across the core dimensions of cost, speed, transparency, and access. The qualitative strand combines four purposively selected semi-structured expert interviews, documentary and thematic analysis of a curated corpus of 45 public policy and practitioner transcripts, and a single-round Delphi-informed structured expert elicitation exercise that produced 11 returned records overall, used to elicit and compare expert judgement rather than to generate consensus through multiple rounds.
The findings show that no single architecture provides a universal solution across all corridors and use cases. Architecture performance varies according to corridor conditions, infrastructure maturity, liquidity design, governance coordination, legal certainty, and institutional incentives. Interlinked instant payment models appear particularly strong in improving retail time-to-credit and local distribution in suitable contexts, while tokenised settlement arrangements show greater potential in use cases where reconciliation, programmability, and liquidity timing are more important. At the same time, the evidence does not support a simple disintermediation thesis. Rather, it suggests a re-specialisation of intermediary roles across liquidity provision, FX execution, compliance, orchestration, settlement access, and trust infrastructure.
The dissertation concludes that the most plausible future of cross-border payments is hybrid, layered, and functionally specialised rather than defined by the wholesale replacement of incumbent systems. It also develops the Hybrid-Complementary Multi-Layer Stack, an author-developed conceptual synthesis model showing how user-interface, distribution, tokenised-settlement, and governance layers are likely to coexist across corridors and use cases. Its main contribution is therefore to provide both a defensible, time-stamped comparative framework for evaluating cross-border payment architectures across performance, governance, and risk dimensions and a practitioner-oriented synthesis model of their likely coexistence.