Written evidence from the Emerging Payments Association (TFP0037)





The Emerging Payments Association (EPA) welcomes the opportunity to contribute to the Foreign Affairs Committee’s Call for evidence Tech and the future of the UK foreign policy . 


The response contained in this paper reflects views expressed industry experts who have been are referenced. As the EPA’s membership includes a wide range of companies from across the payments value chain, and diverse viewpoints across all job roles, this response cannot and does not claim to represent the views of all members fully.


We are grateful to Robert Courtneidge, one of the EPA’s longest standing advisors, who has drafted this response. We would also like to express our thanks to the FAC for their continuing openness in these discussions. We hope it advances our collective efforts to ensure the UK’s payments industry continues to be progressive, world-leading and secure, and effective at serving the needs of everyone who pays and gets paid.



Tony Craddock

Director General

Emerging Payments Association






The section numbering below corresponds to the numbering of the ‘written evidence’ in this call for evidence.



1.      What technologies are shifting power? What is the FCDO’s understanding of new technologies and their effect on the UK’s influence?



Whilst there are many technologies developing in the space of the international cross border transfer of money, most are based on the existing status quo. Hence, the emergence of SWIFT gpi, a significant development on the existing SWIFT messaging network enabling a transparency never been seen before to shine its light on each stage of the money remittance as funds move from bank to bank until they reach their final destination.  Whether this was in response to the growth of CBDCs and Ripple or just a natural progression is not known, but it means that, in order to compete, these new technologies will need to develop friction-free, cost-free and instant clearance solutions.


The benefit of a Ripple-based messaging system backed with XRP, the Ripple token, for real time transmission of both the message and the funds, is that transfers no longer require banks at each end of a transaction with the necessary liquidity to be fulfilled. With smart contracts the ability to create 100% guaranteed Letters of Credit, for example, show the power this new technology possesses.


The ability of blockchain to work in a borderless environment gives it great power but it also creates the need for accountability to enable trust by governments and individuals alike.  As these technologies evolve so must the regulation and compliance but in a way that neither stifles nor kills them.  If the FDCO wants to see the UK flourish, then the environment to enable these technologies needs to be constantly developed and refined.


Separately, but of no less importance, is not the building of but the interoperability between the technologies and bridging between them.



For the UK to take advantage of these new technologies then it needs to focus on the ability of its government to create the best environment for them, both legally and technologically. An emerging area of technology that is transforming financial services involves cryptoassets and their underlying technology known as distributed ledger technology (DLT)[1]. The Kalifa Review rightly acknowledges that “the UK has the potential to be a leading global centre of the issuance, clearing, settlement, trading and exchange of crypto and digital assets”[2].


To keep the best and most innovative companies in the UK will require the right incentives as well as the right assistance to ensure they can keep the best staff and best businesses.  The APPG on Blockchain has been running since 2018 and has gained great support from industry – its most recent report on evidence for digital assets and tokenisation has excellent content[3]. The APPG would be a good source of information for the FCDO to gain a better understanding of this area in order to promote the UK’s pre-eminence in this space.   In order to properly promote the UK in this context, the FCDO needs to get more involved in projects that will showcase the UK and make it the hub for innovation.


2.      How can the FCDO engage with private technology companies to influence and promote the responsible development and use of data and new technologies?


By working with key industry associations such as UK Finance and the Emerging Payments Association, the FCDO will gain better insight and access to the key technology companies in this area.  In addition, it could look to grow mini tech valleys across the UK which could be used for urban redevelopment of areas in the same way that Shoreditch in London has become a Fintech hub.  Financial and tax incentives combined with this regeneration will attract new fintechs to the UK and grow its position in the world.


3.      How can the FCDO engage with private companies to encourage internationally accepted norms for the use of social media as well as to maximise the benefits for diplomacy presented by social media?


We do not wish to comment. 


4.      How can the FCDO use its alliances to shape the development of, and promote compliance with, international rules and regulations relating to new and emerging technologies? Is the UK taking sufficient advantage of the G7 Presidency to achieve this? 


The FDCO can collaborate with other UK government departments, public bodies and industry stakeholders to encourage the widespread adoption of codes promoted by regulators such as the FCA and for the UK to be recognised internationally as a beacon of best practice. In addition, the FDCO can harness the expertise and knowledge of its stakeholders to encourage the creation and take-up of common rules and regulations that are fit for purpose globally.


The EPA welcomes the approach to policy development suggested by TheCityUK last May in its Report on cryptoassets[4], which aims to create a gold standard regulation on crypto and DLT to ensure that the UK will be viewed as the leader in this area by the international community.


5.      Should the Government’s approach to meeting the challenges of technology nationalism and digital fragmentation be based on self-sufficiency, joining with allies or like-minded nations or supporting a coherent global framework?


We do not believe that any of these options are binary and would propose a mixed approach.  Technology nationalism should not be fostered as it is isolationist and reduces speed of adoption. We would welcome the creation of an international network based on interoperability, which promotes open source technology so that all nations can participate in the development and growth of new inclusive solutions.


We see the UK as a nation that can be an international bridge between different technologies and, equally, we see a new era of the GBP as an international settlement currency in the high tech sector.  The UK has always been a global banking centre with the Bank of England (BoE) as its rock. Whilst the growth of CBDCs brings the potential for the growth, rather than retraction, of national boundaries, an international settlement account at the BoE could be a globally accepted solution enabling sovereignty of central bank issued money to remain alongside an ability to make international payments.  The UK needs time to develop a solution in this space in collaboration with the most advanced central banks working on CBDCs and other key industry players.

6.      What opportunities and challenges do cryptocurrency and distributed ledger technologies such as blockchain present for the way the FCDO does diplomacy (for example, enforcing sanctions), and how can the FCDO harness these technologies as new tools of influence or to promote compliance and transparency in international agreements?

To the extent that a new settlement account can be developed at the BoE for CDBCs, then there will be a technological means for the FDCO to manage the exposure of the UK to CDBCs from sanctioned nations and, by default, to restrict the ability of that country to trade using them in international markets.  The potential impact of a new settlement account for CBDCs at the BoE would need to be tempered by the rule of law to avoid abuse and claims of bias.  In addition, in order to win international take up, it must be seen as neutral and independent.  The ability to win the support of all nations to be part of the new era GBP community will require both ease of access and the ability to exit at a moment’s notice from any such a settlement system.  Nations will stay with the settlement account for as long as they trust it and must have the unfettered ability to leave it.


7.      How can the FCDO help build resilience in civil society, in Government, business and foreign relations against the threats posed by abuses of new technologies by state and non-state actors? Can the FCDO support trust-building networks?


We do not wish to comment. 


8.      What would the implications be of the dollar losing its dominant position for international transactions? Will digital currencies force a change in the balance of power?


This final question is the key one in respect of ‘all of the above’.  Over time, different currencies have defaulted to being the ‘reserve currency’ and the current incumbent is the US dollar – but there are signs of its dominance waning[5].  The previous reserve currency was the GBP which is still in 3rd position behind the Euro today.  The growth of digital currencies could give the BoE the opportunity to regain a more prominent position.  We believe that the independence of the UK and its ability to be an impartial arbiter in an ever-decentralised financial marketplace could give it the edge over other nations in this space.


This is the right time for substantial discussions and actions to be taken on the creating of a new era GBP to provide such a solution because of:



The EPA is currently engaging with all the key players to co-create a Green Paper entitled “New Era GBP” to debate all the opportunities this can offer.

About the EPA


The Emerging Payments Association (EPA), established in 2008, sets out to make payments work for everyone. To achieve this, it runs a comprehensive programme of activities for members with guidance from an independent Advisory Board of 16 payments CEOs.


These activities include a programme of digital and (when possible) face-to-face events including an online annual conference and broadcast awards dinner, numerous briefings and webinars, CEO Round Tables, and networking and training activities. The EPA also runs six stakeholder working groups. More than 100 volunteers collaborate on the important challenges facing our industry today, such as financial inclusion, recovering from Covid-19, financial crime, regulation, access to banking and promoting the UK globally. The EPA also produces research papers and reports to shed light on the big issues of the day and works closely with industry stakeholders such as the Bank of England, the FCA, HM Treasury, the Payment Systems Regulator, Pay.UK, UK Finance and Innovate Finance.


The EPA has over 130 members that employ over 300,000 staff and process more than £7tn annually. Its members come from across the payments value chain including payments schemes, banks and issuers, merchant acquirers, PSPs, retailers, TPPs and more. These companies have come together to join our community, collaborate, and speak with a unified voice.


The EPA collaborates with its licensees at EPA EU and EPA Asia to create an interconnected global network of people passionate about making payments work for all.


See www.emergingpayments.org for more information. Contact malik.smith@emergingpayments.org for assistance.










June 2021


[1] TheCityUK, May 2021 “Cryptoassets: shaping UK regulation for innovation and global leadership” https://www.thecityuk.com/research/cryptoassets-shaping-uk-regulation-for-innovation-and-global-leadership/

[2] Kalifa Review p. 30, February 2021 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/978396/KalifaReviewofUKFintech01.pdf

[3] https://uk.bicpavilion.com/images/publication/80711607100257.pdf

[4] TheCItyUk, May 2021 “Cryptoassets: shaping UK innovation for innovation and global leadership”

[5] https://www.ft.com/content/408d4065-f66d-4368-9095-c6a8743b0d01