Kosta Peric, who leads the Bill & Melinda Gates Foundation's work to assist governments, a central banks.

Cross-border payments were scrutinised at a recent Interledger Foundation Summit in Cape Town, South Africa, as participants discussed significant challenges tied to these transfers.

Participants heard how remittances were quickly overtaking foreign direct investment (FDI) but the regulatory environment remains a key challenge.

Recent data, according to the Interledger Foundation, indicates that remittances to low- and middle-income countries are projected to reach approximately $656 billion, surpassing both official development assistance and FDI.

This has increased the urgency to facilitate fast, safe cross-border payments.

Nonetheless, a lack of harmonised regulation has complicated the environment, but the growing importance of remittances is serving as an incentive for central banks to draft enabling laws, the delegates heard.

Attendees were warned that for now, cross-border payments were still regarded as the ‘Wild West’ of the payment landscape, and that if organisations were looking for a solution, they may be forced to build one.

Delegates also heard from Kosta Peric, who leads the Bill & Melinda Gates Foundation's work to assist governments, central banks, and private-sector stakeholders in developing and deploying inclusive digital payment and identity platforms.

He contextualised the need for inclusivity by explaining the high costs of relying on cash and how the most vulnerable had to walk long distances or take expensive transportation to spend their money.

Fortunately, he explained, this is changing as technology advances.

Payment leaders, regulators and developers shared successes and outlined how to build an inclusive global financial system.

“We’re on the brink of a financial revolution that has to do with digital finance. Much like the internet fundamentally changed things in the early days, we’re about to do that again with the financial industry, and it's so exciting,” said panellist and CEO of Least Authority, a Web3 security consulting company, Liz Steininger.

Steiningerwent on to say: “But we must make sure that we architect this in a way that we can protect human rights while still giving more people access to financial services. We just have a small window of time, and we must take it seriously.”

Adrian Hope-Bailie, founder of Fynbos, added: “Fifteen years ago, it was very hard to innovate in this space. And I think it's underappreciated how much cryptocurrencies and blockchain have achieved. Not in terms of replacing what's there, but pushing boundaries and forcing people to rethink access.”

Furthermore, the Interledger team shared the work it was doing with the United Nations. In May, the organisation was mandated by an intersectional working group of the United Nations Internet Governance Forum to investigate open, interoperable payment protocols and what this could mean for the future of the Internet in 2030 and beyond.