The Bank for International Settlements (BIS) is launching Project Rialto to investigate enhancements to instant cross-border payments. This initiative implements a modular foreign exchange component in conjunction with wholesale central bank digital currencies (wCBDC).
Named after the iconic bridge in Venice linking both sides of the Grand Canal, Project Rialto is a collaborative effort involving the BIS Innovation Hub Eurosystem and Singapore Centres along with several central banks. It aims to explore a new automated foreign exchange settlement layer utilizing wCBDC as a secure settlement asset, suitable for interlinked instant payment systems or digital asset systems.
Enhancing cross-border payments is a fundamental international policy objective and a priority for the G20. Foreign exchange is a critical factor in these payments, yet current FX services offered by correspondent banks are often costly, slow, and complex, exposing participants in the payment chain to liquidity, credit, and settlement risks.
The BIS states, “Decentralized solutions, CBDC, and interlinked payment infrastructures are viewed as promising avenues for improving cross-border payments. The interactions among these elements have not yet been explored and could provide insights that promote advancements in global cross-border payments.”