Emerging central bank digital currency cross-border transaction technology could transform the global economy by providing faster, cheaper and safer services for many of its players. But banks may not fare as well in that new economy, Moody’s Investor Service said in a report dated March 21.

Many proposals for the domestic use of CBDCs foresee a crucial intermediating role for banks in their operations, but cross-border CBDC transactions would depend on entirely new infrastructure that reduced the role of banks more severely, Moody’s pointed out. Banks would see benefits from the new technology, too. Settlement risk could be reduced or eliminated:

“Banks would be able to make, clear, and settle cross-border payments at low cost and in seconds without needing to sign up to multiple payment systems or rely on correspondent banks in other countries.”

The same innovations would also “reduce banks’ profits from payments, correspondent services and likely also from foreign-exchange transactions.” The role of correspondent banks could be eliminated entirely. Not only that:

“In a CBDC-driven economy, banks may well need to redesign their operations. They may be obliged to join new networks and create the infrastructure necessary to support CBDC interoperability at scale, which will impose a burden on resources in the short term.”

Interoperability for both retail and wholesale CBDC is being worked out in experimental projects, often with the participation of the Bank for International Settlements. “Central banks may need to compromise on some of the decision-making to make their CBDCs interoperable,” Moody’s said. Otherwise, “digital islands” could be created among small groups of countries that can transact with each other but no other countries.

Related: India, UAE to explore CBDC bridge to facilitate trade, remittances without USD

Issues such as Anti-Money Laundering, sanctions and privacy would require a legal and regulatory framework, and support for CBDCs is not universal. “Financial incumbents who benefit from existing architecture will likely not help facilitate adoption,” the report said.

A United States CBDC faces opposition from some lawmakers because of privacy concerns. Direct exchange of currencies could also reduce the role of the U.S. dollar in the world economy, which does not add to its appeal in Congress.

Moody’s downgraded the U.S. banking sector to “negative” on March 14. It has examined the potentially disruptive effects of CBDC on commercial banking before. The present report came out nearly simultaneously with the U.S. Treasury report detailing potential effects a CBDC could have on the domestic banking system.