The cost of cross-border transaction is pretty high as is the time needed for such settlements.
- For example, let's say India and US develop their respective CBDC's in the near future and assuming that these two systems can talk to each other, then transactions between these two countries need to wait for banks to settle these transactions. So an Indian importer can pay his american vendor in real time, and the transactions are final and its as if dollar cash is handed over.
- Advantages:
- No need for the US federal reserve to be open for these settlements.
- Time zone differences would be immaterial in these transactions.