Project Rialto: improving instant cross-border payments using central bank money settlement

The retail cross-border payments market is valued at more than $800 billion of transactions per year, and is growing. Despite this, retail cross-border transactions lag domestic ones in terms of cost, speed, access and transparency because of the complex processes they involve. This complexity comes from a number of factors, including compliance, market infrastructure, foreign exchange (FX) services and settlement assets and procedures.

Project Rialto has two main contributions. First, it will show how an automated FX conversion layer with settlement in central bank money can help simplify the payment chain and reduce a number of risks such as liquidity, credit and settlement risks, potentially reducing the cost of retail cross-border payments. Second, the project will combine instant payment systems with a next generation tokenised market infrastructure for central bank money settlement. Such integration raises some specific challenges and design considerations, which will be addressed in the development phase and form an integral part of the project's contributions to improving cross-border payments.

The interim report outlines the main features and challenges in the retail cross-border payments market, identifying the main policy and technical aspects to be considered in Project Rialto. Details of the proof of concept, as well as findings from the experiment, will be described in the final project report.