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 targets FX- and settlement-related frictions in retail cross-border payments. The project’s goal is to develop a proof of concept to demonstrate the technical feasibility of retail cross-border payments using interlinked instant payment systems together with an automated FX wholesale conversion layer that allows the use of central bank money (CeBM) as a safe settlement asset.
Project Rialto has two main contributions. First, it will show how an automated FX conversion layer with settlement in CeBM 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 CeBM 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.
This 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.
Project Rialto is a collaboration between the BIS Innovation Hub Eurosystem and Singapore Centres, the Bank of France, the Bank of Italy, Bank Negara Malaysia (the Central Bank of Malaysia) and the Monetary Authority of Singapore.
More details: Project Rialto – Improving instant cross-border payments using central bank money settlement
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
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