Multilateral connectivity is the direction that we need to go in order for crossborder payments to be optimised. 13. Jurisdictions’ digital payments infrastructure yield potential for cross-border connectivity. MAS has embarked on a pioneering journey with the Bank of Thailand to link up our respective national retail faster payment systems – PayNow in Singapore, and PromptPay in Thailand. This linkage between our two countries’ faster payment systems will go live in the middle of 2021. To achieve our eventual aim to facilitate global cross-border payments however, we need to progress towards multilateral digital connectivity. As a starting point, adoption of harmonised protocols across national digital payments systems and infrastructures are necessary. The ISO 20022 payments messaging standard is a clear example of such a protocol. The successfully-concluded hackathon presented earlier demonstrated the potential of this standard and APIs to enhance cross-border payments. Central banks need to explore the road to multilateral connectivity in cross-border payments together. 14. The future digital payments landscape is still emerging. It is thus necessary to explore multiple fronts in order to be future-ready. To this end, the Singapore Centre of the BIS Innovation Hub, with the support of MAS, is experimenting on platforms for multilateral connectivity through two of the projects that the Singapore Centre shared on earlier – the Foundational Digital Infrastructures Project based on traditional technologies, and Project Dunbar, a multilateral multi-CBDC wholesale 4/5  BIS central bankers' speeches  settlement platform. We also heard from the Hong Kong Centre two days ago about their Multiple CBDC Bridge project.

Likewise, in the current environment of low inflation and interest rates verging on their lower bound, the inflation target must take into account the need for a sufficiently high buffer, above zero, granting conventional interest rate policy more room for manoeuvre. Another key aspect will be which tools are to be included in the ECB’s monetary policy toolkit and how they are to interact within the new strategic framework. In this regard, it seems clear that one of the current review’s takeaways will be that, against the backdrop of low natural interest rates and greater constraints on the use of nominal interest rates as a stabiliser, asset purchase programmes and liquidity-providing operations have become part of central bankers’ conventional “toolkit”. One problem specific to the euro area is the so-called “fragmentation” in the transmission of the common monetary policy. This means that governments’ financing conditions vary significantly across countries as a result of, among other factors, the different sovereign risk premia in the euro area. This, in turn, also impacts on firms’ and financial institutions’ financing costs in the different countries. In fact, the cost of government debt in each country usually acts as a “floor” or “baseline” for corporate and bank debt. Consequently, in those countries whose governments’ debt repayment prospects are better and which therefore have more favourable financing conditions, the borrowing costs of firms and households, through bank credit, will be lower.