- The BIS Innovation Hub revealed Project Rialto, connecting central banks from France, Italy, Malaysia, and Singapore to explore retail cross-border payments.
- The project integrates domestic faster payment systems with a multinational DLT platform supporting tokenization and multiple CBDCs.
- FX costs currently represent 50-90% of the $800 billion annual retail cross-border payment expenses.
- Project Rialto proposes a hybrid model combining automated market makers (AMMs) with traditional order books for FX transactions.
- The initiative builds upon previous BIS projects, including Project Mariana, while aligning with G20’s cost reduction objectives for cross-border payments.
The Bank for International Settlements (BIS) has published a detailed framework for Project Rialto, a pioneering initiative to revolutionize retail cross-border payments through distributed ledger technology (DLT) and innovative foreign exchange mechanisms.
The project brings together the central banks of four nations – France, Italy, Malaysia, and Singapore – in an unprecedented collaboration to address the costly inefficiencies in international money transfers. This builds upon the foundation laid by Project Mariana, where the Banque de France and Monetary Authority of Singapore previously explored DeFi-inspired solutions for FX trading.
At its core, Project Rialto introduces a three-tier architecture: domestic fast payment systems, a multinational DLT platform for tokenization, and a settlement layer supporting multiple central bank digital currencies (CBDCs). This integrated approach targets the FX component of cross-border transfers, which currently accounts for up to 90% of the $800 billion annual retail payment costs globally.
The project’s innovative hybrid FX model combines two popular trading mechanisms: automated market makers (AMMs) – algorithms that maintain pools of currencies for automated trading – and traditional order books. This dual approach allows transactions to first seek matching orders in the book before defaulting to AMM liquidity pools, maximizing efficiency and reducing costs.
Project Rialto emerges alongside other significant BIS initiatives, including Project Agorá, which involves seven central banks and 41 institutions exploring tokenized correspondent banking, and Project Meridian FX, focused on payment system interoperability between the UK and EU.
The framework represents a significant step toward the G20’s objective of reducing cross-border payment costs while addressing key concerns around liquidity, credit, and settlement risks in international transfers. The proof of concept phase is scheduled to commence following this preliminary outline of technical and policy considerations.
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