Mary-Elizabeth McMunn, Deputy Governor of the Central Bank of Ireland, delivered the warning on 11 June 2026 at a Financial Services Ireland conference in Dublin. The speech carried a title that captured both the opportunity and the threat: "International financial services in fragmenting times." McMunn framed the current environment as one of unprecedented scale and pace of change, coming on top of an already complex and interconnected risk landscape. The implication for payment infrastructure providers was unmistakable: the assumptions underlying fiat-only settlement models are eroding.

The fragmentation McMunn describes is not abstract. Correspondent banking, the backbone of cross-border fiat payments for decades, has been in sustained decline across all regions of the world. BIS data confirms that the number of active correspondent banks has fallen consistently over the past decade, even as payment volumes have continued to rise. The result is corridor concentration: fewer banks handling more traffic, with higher costs and slower speeds in exactly the markets where institutional clients need flexibility. This is not a temporary dislocation; it is a structural retreat that regulatory bodies including the FSB have been tracking since 2016.

The G20's cross-border payments roadmap was designed to address precisely these frictions. Launched in 2020 and targeting improvements by end-2027, the initiative set quantitative goals for cost, speed, transparency, and access. But the FSB's latest progress report, published in October 2025, acknowledged an uncomfortable reality: while most policy actions under the roadmap have been completed, these efforts have not yet translated into tangible improvements for end-users at the global level. The FSB now openly concedes that satisfactory improvements in line with the 2027 timetable are unlikely. For PSPs, this signals that fiat infrastructure modernisation alone will not deliver the corridor flexibility their clients require.

The migration to ISO 20022, which became the exclusive standard for cross-border payments and reporting in November 2025, was meant to unlock operational efficiencies and better data transparency. Yet even this milestone exposes the limits of upgrading legacy rails. ISO 20022 improves structured data and compliance screening, but it does not resolve the fundamental problem: fiat rails depend on correspondent relationships that are shrinking, and the jurisdictions where fragmentation is most acute are often the same ones where those relationships are hardest to maintain. The next ISO 20022 milestone in November 2026 will require the removal of unstructured postal addresses entirely, a compliance burden, but not a solution to corridor availability.

What McMunn's speech illuminates is that fragmentation creates a parallel infrastructure opportunity. As traditional rails become constrained by geopolitics, regulatory divergence, and de-risking economics, alternative settlement mechanisms, including stablecoin rails and tokenised assets, are gaining institutional traction. The EU's Markets in Crypto-Assets Regulation has created a licensed framework for e-money tokens, and issuers including Circle and Société Générale-FORGE now offer MiCA-compliant stablecoins positioned for institutional settlement and corporate treasury use. In the United States, the GENIUS Act signed in July 2025 established the first federal framework for payment stablecoins, with final rules expected by July 2026. The regulatory scaffolding for multi-asset settlement is no longer speculative; it is being built.

This is where the competitive fault line emerges. A PSP confined to fiat-only rails can optimise within the correspondent banking model, but it cannot escape the model's limitations. When a client needs to settle value across a corridor where the correspondent relationship has been severed or priced out of viability, the fiat-only provider has no alternative path. A provider with multi-asset capability, one that can route through stablecoin rails, tokenised settlement layers, or hybrid infrastructure, retains optionality. In a world of hardening fragmentation, that optionality is not a feature; it is the difference between operational relevance and structural obsolescence.

The IMF has warned that geoeconomic fragmentation is introducing new frictions to cross-border payments even as new platforms based on digital forms of money are being explored. These are not opposing forces; they are the same force viewed from different positions. Fragmentation is the problem; multi-asset infrastructure is one of the available responses. PSPs that understand this will architect accordingly. Those that do not will find themselves confined to corridors that are contracting, priced out of corridors that remain viable, and structurally incapable of serving clients who need to move value across jurisdictions that no longer align.

McMunn's speech was not a call for deregulation or a pitch for digital assets. It was a sober acknowledgment that the operating environment has shifted, and that institutions serving international financial flows must navigate both the opportunities and the responsibilities that come with fragmenting times. For payment service providers, the operational question is no longer whether to explore multi-asset capability, but how quickly they can integrate it before the corridors they depend on narrow further.

References

[1] Mary-Elizabeth McMunn, "Opportunities and responsibilities - international financial services in fragmenting times," Bank for International Settlements, 16 June 2026

[2] Financial Stability Board, "G20 Roadmap for Cross-border Payments: Consolidated progress report for 2025," October 2025

[3] BIS Committee on Payments and Market Infrastructures, "About the programme - G20 Cross-border Payments,"

[4] SWIFT, "ISO 20022: A new era for global payments," November 2025

[5] SWIFT, "ISO 20022 milestone for November 2026: Unstructured addresses to be removed," March 2026