"Beneath the surface, though, global payments remain slow, costly, and overly dependent on a single hub: New York. The reason is correspondent banking, the plumbing of international finance built for a different era. Instead of funds moving directly from one country to another, a bank relies on an intermediary, often a U.S. bank in New York, to provide services on its behalf. That made sense when technology was limited and trust was scarcer. Today, it has become a bottleneck."
"The transaction typically detours through a U.S. correspondent bank before reaching Germany. That extra leg adds time, fees, and operational risk-even when neither party has any commercial tie to the United States. If the same flight path were imposed on travel-Kenya to New York to Germany-we'd call it inefficient design. Yet we accept similar friction for the world's financial arteries."
"As for New York, the city is the center of global finance for good reasons: the dollar's status as the world's reserve currency, deep U.S. capital markets, and the reliability of U.S. rule of law. Those are strategic assets. Many rightly value the advantages they confer-from lower funding costs to unrivaled financial depth. The objective, then, is not to "route around" New York or diminish U.S. influence."
Global cross-border payments remain slow, costly, and overly dependent on a single hub, New York. Correspondent banking forces many transactions to route through intermediary U.S. banks rather than move directly between countries. That extra leg adds time, fees, and operational risk even when neither party has ties to the United States. The concentration around New York reflects the dollar's reserve status, deep U.S. capital markets, and reliable U.S. rule of law, which are strategic assets. The objective is to upgrade payment rails so dollar settlement becomes more accessible, resilient, and competitive, reducing inefficiency and systemic vulnerability to shocks.
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