Toh Wee Kee

Traditional AML/CFT frameworks for cross-border payments were built around correspondent banking, a model that relies on centralised oversight and intermediary controls. However, the rise of payment tokens on blockchain introduces greater transparency, real-time traceability, and enhanced enforcement capabilities—enabling regulators and financial institutions to detect, monitor, and act on illicit activity more efficiently than ever before. 

As the global financial system undergoes a paradigm shift toward tokenized payments, it is crucial to re-examine payment control mechanisms in this new landscape. This roundtable will convene leading regulators, financial institutions, and blockchain experts to explore: 

1.  How blockchain-based payment tokens enhance monitoring, detection, and enforcement – Are decentralized networks more transparent than traditional banking rails? What are the limitations? 
2. Redesigning payment controls for a tokenized world – Should AML/CFT rules evolve to account for programmability, smart contracts, and decentralised compliance models? 
3. Moving forward: Bridging regulatory principles with tokenized payments – How can policymakers, financial institutions, and blockchain innovators collaborate to ensure payment security without compromising efficiency? 

Distributed ledger technology (DLT) is frequently highlighted as a game-changer for financial market infrastructure (FMI). Yet, despite numerous pilots, proofs of concept, and even some production deployments, it has (yet) neither replaced nor fundamentally transformed today’s financial markets. Rather, DLT has remained limited to niche applications.

Which key elements are still missing, or are insufficiently mature, to enable DLT to truly reshape FMI? Is the main hurdle the current regulatory framework, or do challenges around standardization, interoperability with legacy systems, scalability, governance, and proven use cases with sufficient value bear the greatest responsibility?