International Finance Bank LTD

Our Services for new Regional Currencies 


International Finance Bank Ltd. (IFB) offers an unparalleled suite of financial services to support the establishment, management, and exchange of regional currencies, seamlessly integrating them into the global financial system. Our expertise, infrastructure, and innovative solutions position us as a trusted partner for governments, monetary authorities, and financial institutions aspiring to develop and stabilise a new regional currency.


Facilitating Currency Reserves and Convertibility

As a custodian of both regional and fiat currency reserves, IFB provides the foundational infrastructure for convertibility and stability. By maintaining robust reserves in fiat currencies and supporting the liquidity of the regional currency, we enable secure and efficient exchange mechanisms. Our dual-account systems allow clients to hold both regional and fiat currencies, ensuring seamless transitions between the two.


Exchange and Liquidity Management

To enhance the utility of a regional currency, IFB offers comprehensive foreign exchange (FX) services:

  • Direct Exchange Rates: Facilitate conversions between the regional currency and global fiat currencies without intermediary steps.
  • Market Liquidity: Act as a market maker, ensuring consistent availability of the regional currency for trade and commerce.
  • Currency Hedging Solutions: Provide forward contracts, swaps, and other derivatives to mitigate exchange rate volatility risks.


Clearing and Settlement

Through advanced settlement infrastructure, IFB ensures that transactions involving the regional currency are processed efficiently and securely:

  • Integrated Clearing Systems: Enable multi-currency transactions with real-time processing capabilities.
  • SWIFT GPI and Blockchain Solutions: Deliver transparency, speed, and security in cross-border settlements.
  • Real-Time Gross Settlement (RTGS): Facilitate high-value transactions with immediate settlement, supporting large-scale commerce.


Trade and Economic Integration

Our services are tailored to enhance the adoption of regional currencies in trade and economic systems:

  • Regional Trade Financing: Support invoicing and settlements directly in the regional currency, reducing dependency on external fiat currencies.
  • Letters of Credit and Guarantees: Issue trade instruments denominated in the regional currency to bolster its use in international markets.


Digital Integration

IFB empowers regional currencies to thrive in a modern financial ecosystem:

  • Digital Currency Platforms: Support digital forms of regional currencies, leveraging blockchain for secure issuance and transactions.
  • Mobile Payment Solutions: Integrate regional currencies into mobile wallets and e-commerce platforms, enhancing accessibility.
  • Interoperability with CBDCs: Ensure compatibility with emerging Central Bank Digital Currencies, reinforcing the currency’s relevance in a globalised economy.


Regulatory and Advisory Services

Our advisory expertise extends to:

  • Currency Design and Implementation: Guide issuing authorities on optimal structures for stability, growth, and integration.
  • Reserve Management: Assist in establishing policies for fiat reserves backing the regional currency.
  • Auditing and Compliance: Offer transparent, third-party audits of reserves and operations to build trust among stakeholders.


Promoting Confidence and Adoption

IFB supports widespread adoption of regional currencies through strategic initiatives:

  • Incentivised Transaction Costs: Reduce fees for regional currency transactions, encouraging its use in trade and remittances.
  • Community and Market Engagement: Promote the currency’s benefits to businesses, consumers, and diaspora communities.


With IFB’s expertise, infrastructure, and global reach, we offer a comprehensive framework to ensure the stability, credibility, and utility of any regional currency. By bridging regional ambitions with global financial standards, IFB enables the successful integration of new currencies into a competitive and interconnected monetary system as follows:

1. Creation of the Regional Currency Framework 

1.1 Currency Design and Governance 

  • Issuing Authority: Designate a central institution (e.g., IFB,  a Regional Currency Monetary Authority or consortium of central banks) responsible for the issuance and regulation of Regional Currency. 
  • Backing Mechanism: Peg Regional Currency to a basket of fiat currencies (e.g., USD, EUR, GBP) or commodities (e.g., gold, oil) to ensure stability and instill confidence. 
  •  Supply Regulation: Define clear monetary policies, such as reserve requirements and issuance limits, to control inflation and maintain value. 

1.2 Integration into IFB 

  • Reserve Allocation: Establish reserves at IFB in fiat currencies to back the issued Regional Currency, ensuring full or fractional convertibility based on policy objectives. 
  • Liquidity Fund: Create a liquidity pool within IFB to handle large-scale conversions between Regional Currency and fiat currencies. 

 

2. Currency Distribution Mechanism 

2.1 Account Structures 

  • Dual-Currency Accounts: IFB should allow clients to hold accounts denominated in both Regional Currency and fiat currencies, facilitating seamless conversions.
  • Nostro and Vostro Accounts: IFB maintains nostro accounts in Regional Currency for partner banks and provides corresponding vostro accounts for regional banks or businesses. 

2.2 Initial Distribution 

  • Central Bank Allocation: Distribute Regional Currency to participating central banks in exchange for fiat currency reserves held at IFB. 
  • Private Sector Access: Allow commercial banks, businesses, and individuals to acquire Regional Currency via IFB accounts. 

 

3. Conversion Process  

3.1 Exchange Rates  

  • Fixed or Floating Rate: Decide whether Regional Currency will operate under a fixed exchange rate (pegged to a fiat basket) or a managed float system. 
  • Real-Time FX Platform: Develop a currency trading platform integrated into IFB to handle real-time conversion rates between Regional Currency and fiat currencies. 

3.2 Automated Conversions  

  • Implement automatic conversion mechanisms within IFB’s digital banking infrastructure, enabling instant exchange of Regional Currency into fiat and vice versa. 

 

4. Clearing and Settlement System 

4.1 Clearing Infrastructure  

  • Establish a robust clearing and settlement system at IFB to process all Regional Currency transactions. 
  • Utilize SWIFT GPI or blockchain technology to ensure fast, transparent, and secure settlements. 

4.2 Real-Time Settlement 

  • Implement a real-time gross settlement (RTGS) system for high-value transactions in Regional Currency and fiat currencies. 

 

5. Risk Management 

5.1 Reserve Requirements 

  • Maintain a reserve ratio (e.g., 100% or fractional) to back the Regional Currency with fiat currencies held in IFB accounts. 
  • Diversify fiat reserves across stable currencies to reduce exposure to individual currency risks. 

5.2 Hedging Mechanisms 

  • Offer currency hedging services to protect Regional Currency holders from potential exchange rate fluctuations. 

 

6. Promoting Adoption  

6.1 Trade and Commerce 

  • Encourage regional trade partners to accept Regional Currency for invoicing and settlement. 
  • Provide incentives, such as reduced fees for Regional Currency transactions. 

6.2 Payment Systems 

  • Integrate Regional Currency into digital payment platforms, enabling usage for everyday transactions. 
  • Partner with financial technology firms to develop mobile wallets for Regional Currency. 

6.3 Cross-Border Remittances  

  • Promote the use of Regional Currency for remittance flows within the region, leveraging IFB’s infrastructure for low-cost transactions. 

 

7. Transparency and Trust 

7.1 Reserve Audits 

  • Conduct regular third-party audits of Regional Currency reserves held at IFB, publishing results to enhance trust. 

7.2 Regulatory Compliance 

  • Ensure Regional Currency adheres to international standards (e.g., AML/CFT, FATF) to gain recognition and legitimacy in global markets. 

 

8. Digital Integration 

8.1 Regional Currency as a Digital Currency 

  • Develop Regional Currency as a digital currency, leveraging blockchain technology for security and efficiency. 
  • Implement smart contracts for automated transactions and compliance checks. 

8.2 CBDC Compatibility 

  • Ensure Regional Currency is interoperable with Central Bank Digital Currencies (CBDCs) to facilitate its integration into emerging monetary systems. 

 

9. Role of IFB 

  • Custodian of Reserves: Hold fiat currency reserves to back Regional Currency and manage liquidity. 
  • Conversion Hub: Operate as the central institution for exchanging Regional Currency with fiat currencies.
  • Settlement Agent: Provide clearing and settlement services for Regional Currency transactions. 
  • FX Platform: Maintain an advanced trading platform for Regional Currency conversions. 
  • Advisory Services: Support the issuing authority in designing monetary policies and operational frameworks. 

 

By adopting these strategies, IFB can help you to establish any Regional Currency as a stable, trusted, and widely accepted regional currency convertible into fiat currencies, positioning itself at the forefront of innovative financial solutions in your region.