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Catch up on six of the stories our payments compliance analysts have covered lately, and stay up-to-date on the latest news.

Montenegro And Albania Join SEPA Payment Schemes In Balkan Boon For Payments

The European Payments Council (EPC) has the inclusion of Montenegro and Albania in the Single Euro Payments Area (SEPA) payment schemes, expanding the initiative's geographical scope to 38 countries, including EU and non-EU members such as the UK and Switzerland.

This decision enables financial institutions in these countries to participate in SEPA Credit Transfer (SCT), SEPA Instant Credit Transfer (SCT Inst) and SEPA Direct Debit (SDD) schemes.

Existing SEPA participants will now be able to process transactions with Montenegrin and Albanian institutions once they adhere to the schemes.

According to the EPC, adherence for financial institutions in Montenegro and Albania is set to begin in April 2025.

However, the operational readiness date (ORD) for payment service providers in these countries will be announced at a later stage.

Brazilian Central Bank Names Microsoft, Chainlink In Phase 2 CBDC Pilot

The Banco Central do Brasil (BCB) has Microsoft, Banco Inter, 7Comm and Chainlink as participants in a new study under the Phase 2 pilot of Drex, its central bank digital currency (CBDC).

The four participants will partner with the BCB to facilitate trade finance payments using CBDC.

The proposed solution will leverage blockchain technology and oracles, provided by Chainlink, to automate supply chain management and improve trade finance processes.

An oracle provides trusted information from real-world data sources that can be used to power smart contracts. In effect, an oracle converts real-world data into on-chain data to trigger transactions.

The goal of the pilot is to demonstrate the feasibility of automated settlement of agricultural commodity transactions across borders, across platforms and via different currencies.

Chainlink’s Cross-Chain Interoperability Protocol (CCIP) will enable interoperability between Drex and a foreign central bank, ensuring that transactions are compatible and settled efficiently.

The pilot will involve tokenising electronic bills of lading (eBoL) on-chain and using supply chain data to trigger payments to exporters throughout the shipping process.

The solution aims to demonstrate that blockchain-based trade finance can be used to facilitate both delivery versus payment (DvP) and payment versus payment (PvP).

Participants hope to show that use of CBDC can increase efficiency, security and transparency in global agricultural supply chains.

The trade finance use case is one of 13 “themes” that the BCB in October to be trialled under Phase 2 of the Drex pilot.

These themes include other use cases such as discounting of receivables, optimising foreign exchange (FX) markets, transactions with agribusiness assets and transactions with automobiles.

Spain Becomes First Market To Fully Connect With EU Instant Payments Scheme

Spain’s Iberpay has that the Spanish banking sector is now fully connected with the European Payments Council’s (EPC) One-Leg Out instant (OCT Inst) payments scheme.

“This milestone positions Spain as the first — and currently the only — European banking area fully connected to this innovative scheme,” said Iberpay.

In May, following approval from the EPC, Iberpay became the first payment system in Europe to process international instant transfers based on the OCT Inst scheme.

At the same time, Iberpay onboarded Santander as the first financial institution connected to OCT Inst, which began using Iberpay’s instant payment technology, standards and processing to enable instant cross-currency payments.

OCT Inst allows payment service providers (PSPs) in the SEPA area to process instant international transfers to and from countries outside the euro area. Transactions are typically executed in seconds and are processed 24/7/365.

The scheme also aligns with the G20’s roadmap and strategic goals on increasing speed, reducing costs and enhancing transparency and accessibility in cross-border payments.

“By adopting OCT Inst, the Spanish banking sector contributes to these critical global objectives, ensuring more efficient, optimised and seamless payment solutions worldwide,” said Iberpay.

Big Tech, APAC Central Banks Take Part In Cloud Disruption Simulation

Google, Microsoft and Amazon have taken part in a tabletop simulation of a "severe" outage of public cloud services, affecting the financial sectors of APAC economies.

The Monetary Authority of Singapore (MAS) has its inaugural Financial Sector Cloud Resilience Forum, with support from other APAC regulators and big tech cloud service providers.

The forum, which met on November 6, saw participants take part in a simulation of a severe public cloud service incident, disrupting financial sectors throughout APAC.

The exercise enabled forum members to strengthen their mutual understanding of incident response procedures, identify possible supervisory interventions and collaborate on measures to mitigate service disruption.

The exercise also demonstrated the importance of close collaboration and communication between financial regulators and cloud service providers during an incident — to improve situational awareness, inform decision-making and coordinate recovery efforts.

Regulator participants included the central banks of Japan, Thailand, Hong Kong, Malaysia and the Philippines, plus the Australian Prudential Regulation Authority (APRA) and the Indonesian Financial Services Authority (OJK).

Cloud service participants included Google Cloud, Microsoft Azure and Amazon Web Services (AWS).

Vincent Loy, chair of the forum and assistant managing director for technology at the MAS, said that exercises such as these are necessary as cloud adoption continues to increase within the financial sector.

“This inaugural exercise is timely as it helps to strengthen processes for responding to a major public cloud incident in the financial sector,” he said.

“Through the exercise, both the financial authorities and cloud service providers have gained deeper insights on how to coordinate their efforts effectively in responding to and recovering from disruptions, and maintain public confidence in the financial sector.”

The forum, which the MAS established in 2023, convenes twice yearly to exchange views on appropriate public cloud risk management practices for the financial sector.

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