**Introduction** Digital currencies could support a modern Bancor-like system by enabling multilateral clearing, symmetric adjustment of external imbalances, and neutral liquidity provision without reliance on a single national reserve currency. Advances in wholesale digital settlement infrastructure make it technically feasible to operationalize core Bancor principles that have historically been constrained by institutional and coordination limits. **What is a modern Bancor-like system?** A modern Bancor-like system refers to a multilateral international monetary arrangement built around a supranational unit of account used exclusively for cross-border settlement among participating monetary authorities. Its defining features are: * **Multilateral clearing**, where trade and financial balances are netted across the system rather than settled bilaterally in national currencies; * **Symmetric adjustment mechanisms**, in which both persistent surplus and deficit positions face incentives to adjust; and * **Reduced dependence on national reserve currencies**, limiting global exposure to the macroeconomic policies and geopolitical actions of reserve-issuing economies. In contemporary policy discussions, a Bancor-like system does not imply a single global currency or the replacement of national monetary sovereignty. Instead, it describes a clearing-layer architecture that sits above domestic monetary systems. Fragmentation risks, persistent reserve accumulation, and the expanding use of financial instruments as tools of economic statecraft have renewed interest in neutral, multilateral settlement arrangements[1][2]. **The role of digital currencies in enabling a modern Bancor-like system** **1.** **Digital currencies as an enabler of multilateral clearing** Wholesale digital currencies or tokenized central bank liabilities could function as a shared settlement asset among participating central banks, allowing cross-border positions to be recorded and netted in a common digital unit of account. Interoperable ledger systems enable near-real-time reconciliation of claims and obligations across jurisdictions, reducing settlement risk and easing reliance on large precautionary foreign-exchange reserve holdings. Reliance on national currencies for global liquidity provision has contributed to persistent external imbalances and the concentration of systemic risk within the current international monetary system[2][3]. Digital settlement infrastructure provides a technical pathway to multilateral clearing without displacing domestic currencies or requiring a single issuing authority. **2.** **Programmable symmetric adjustment mechanisms** A central objective of a Bancor-like system is to discourage persistent external imbalances by applying adjustment pressure to both surplus and deficit economies. Digital currencies make it possible to embed such discipline directly into clearing rules through programmable balance thresholds, usage charges, or differentiated remuneration rates applied automatically to sustained positions. Asymmetric adjustment — where deficit economies bear most of the burden — has reinforced deflationary bias and contributed to global financial instability[3]. Programmable settlement mechanisms offer a rules-based way to operationalize symmetric adjustment while preserving national control over domestic fiscal and monetary policy. **3.** **Reduced reliance on national reserve currencies** By settling cross-border transactions in a neutral digital unit of account, a modern Bancor-like system would weaken the link between global liquidity provision and the domestic policy stance of reserve-currency issuers. This could reduce exposure to monetary spillovers, regulatory extraterritoriality, and sanctions-related risk, all of which increasingly shape trade and investment decisions. The expanding use of financial and monetary instruments as tools of geopolitical leverage has accelerated fragmentation pressures and increased demand for neutral, rules-based international arrangements[4]. A digital clearing asset supports this objective by separating international settlement from national balance-sheet constraints. **4.** **Multilateral liquidity provision and shock absorption** A digitally enabled Bancor-like system could incorporate standing liquidity facilities denominated in the settlement unit, allowing temporary overdrafts or credits during systemic shocks such as financial crises or major supply-chain disruptions. These facilities could be rule-based, time-bound, and transparently priced. Access to global liquidity remains uneven and heavily dependent on bilateral swap lines, leaving many economies vulnerable during periods of financial stress[2][3]. Multilateral, digitally mediated liquidity provision could complement existing global financial safety nets while reducing stigma and response delays. **Conclusion** Digital currencies make a modern Bancor-like system technically feasible by enabling multilateral clearing, programmable symmetric adjustment, reduced dependence on national reserve currencies, and more predictable liquidity provision. While political agreement and governance design remain the binding constraints, digital settlement infrastructure lowers the operational barriers that historically prevented such systems from functioning at scale. In an international monetary environment characterized by persistent imbalances, fragmentation risks, and rising geoeconomic leverage, this infrastructure provides a credible pathway for revisiting Bancor-style solutions in a contemporary form.
