If CBDC-to-CBDC settlement becomes common, cross-border payments may rely less on correspondent banking and less on the SWIFT ecosystem. Over time, that could reduce the need for foreign actors to hold U.S. dollars for settlement liquidity. The practical impact would not be immediate collapse, but a gradual erosion of dollar centrality if alternative rails gain scale and trust.
What changes in the payments architecture if CBDC-to-CBDC settlement scales
CBDC-to-CBDC settlement would change the plumbing of cross-border value transfer more than the unit of account itself. The main shift is from correspondent banking and dollar-denominated settlement dependence toward direct or interoperable central-bank rails, which reduces how often the U.S. dollar sits in the middle as a bridge asset.
That matters because dollar centrality is partly sustained by network effects in payments, liquidity management, invoicing, and reserve behavior. If settlement can occur efficiently in other formats and currencies, the dollar loses some of the convenience premium that comes from being the default intermediary.
Why the dollar would weaken gradually, not suddenly
Even if CBDC-to-CBDC settlement becomes common, the dollar would not disappear from global finance. It remains supported by deep capital markets, broad convertibility, legal infrastructure, and longstanding reserve preferences. What changes first is transactional reliance: fewer actors may need to hold dollars for routine settlement liquidity if they can settle more directly.
The pace of any shift depends on adoption scale, trust in alternative rails, foreign-exchange liquidity, and whether cross-border systems can match the speed, finality, and operational reliability of existing dollar-linked workflows. In practice, that means erosion is more likely to show up in marginal flows before it affects the dollar's core reserve role.
What practitioners should watch in reserve behavior and payment routing
The key indicator is not a headline collapse, but whether institutions start choosing non-dollar settlement paths for trade and treasury flows that previously defaulted to dollars. If that pattern expands, the dollar's role as a settlement intermediary weakens even if its reserve status remains strong.
Another important signal is whether liquidity management shifts from dollar pre-funding toward multi-CBDC or local-currency buffers. That would reduce structural demand for short-term dollar balances, especially for counterparties that do not need to invoice or hedge in dollars.
Risk and Threat Considerations
CBDC-to-CBDC settlement introduces a systemic transition risk: as new rails scale, some participants may become dependent on them before operational maturity, interoperability, and legal finality are fully proven. That can create fragmentation, liquidity stress, and a slower adjustment path for dollar-based market infrastructure.
Failure mechanism: If alternative settlement networks gain trust and reach critical mass, foreign users need fewer dollars for bridge liquidity, correspondent links lose volume, and the dollar's network advantage erodes incrementally rather than abruptly.
Impact: The most likely outcome is gradual de-dollarization at the margin, not immediate replacement. The dollar would remain important, but its dominance in cross-border settlement could narrow as other rails become viable at scale.
Standards & Framework Alignment
This section maps relevant standards and security frameworks to the operational risks and controls described in this guidance.
NIST CSF 2.0 sets the technical controls, while ISO/IEC 27001:2022 and DORA define the regulatory obligations.
| Framework | Control / Reference | Relevance |
|---|---|---|
| NIST CSF 2.0 | GV.RM-01 — Risk Management Strategy | CBDC settlement shifts cross-border financial dependency and reserve risk |
| RC.RP-01 — Recovery Plan Execution | Settlement-rail transitions can create disruption if alternative infrastructure underperforms | |
| GV.SC-01 — Cyber Supply Chain Risk Management Strategy | CBDC-to-CBDC settlement depends on interoperable third-party payment infrastructure and trust | |
| Recommendation — Assess payment-rail dependence as a strategic risk to dollar centrality and settlement resilience. Define fallback settlement paths for cross-border payment disruption and rail transition failures. Treat cross-border payment platforms and dependencies as supply-chain risks in resilience planning. | ||
| ISO/IEC 27001:2022 | A.5.23 — Information security for use of cloud services | CBDC settlement platforms will rely on shared digital infrastructure and externally hosted services |
| Recommendation — Set security requirements for externally provided settlement infrastructure and integrations. | ||
| DORA | ICT third-party risk management — ICT Third-Party Risk Management | Cross-border settlement depends on external rail providers and shared financial infrastructure |
| Recommendation — Map and test third-party dependencies that could affect cross-border payment continuity. | ||
Practitioner Guidance
What to prioritize: Focus on settlement demand, not just currency branding. A currency can remain a reserve asset while losing share as a payment intermediary, so the meaningful question is where liquidity is being parked for settlement and why.
What to verify: Track whether new CBDC rails actually reduce reliance on dollar funding, correspondent banking, and SWIFT-linked operational workflows, or whether they simply add another layer on top of the same dollar-centered behavior.
Practitioner takeaway: The strategic risk is erosion of utility at the edges, because reserve status usually changes more slowly than settlement practice.
NIST Cybersecurity Framework 2.0 can help structure governance around emerging payment dependencies and resilience expectations.
Federal Reserve CBDC research is a useful primary source for understanding how U.S. policy thinking frames design trade-offs and settlement implications.
BIS cross-border payments work is relevant because it documents the interoperability and efficiency pressures that drive this shift.
IMF CBDC analysis provides macro-level context on monetary and cross-border effects.
ECB digital euro work helps compare how major monetary authorities are approaching cross-border settlement design.
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Deepen Your Knowledge
Reviewed and updated by the NHIMG editorial team on September 25, 2026.
NHI Mgmt Group — the #1 independent authority on Non-Human Identity, IAM, and Agentic AI security. nhimg.org
