Bank for International Settlements Innovation Hub publishes Project Rialto findings on using tokenised central bank money settlement for instant cross-border payments

The Bank for International Settlements Innovation Hub published a technical report on Project Rialto, a proof of concept developed with the Bank of France, the Bank of Italy, Bank Negara Malaysia and the Monetary Authority of Singapore to test how instant cross-border payments could be improved using a modular foreign exchange (FX) component and settlement in tokenised wholesale central bank money. The experiment targeted FX and settlement frictions in low-value retail cross-border payments such as remittances and other person-to-person transfers executed via the traditional banking channel. The proof of concept simulated both direct cross-border transactions between senders and receivers in different jurisdictions and transactions using a vehicle currency, integrating interlinked instant payment systems with an FX mechanism that leveraged automated market makers and tokenised central bank money as a safe settlement asset on a cross-border distributed ledger technology network. The report also sets out the proof of concept architecture and design and discusses economic considerations related to the viability of the approach, building on earlier BIS Innovation Hub work including Project Mariana and Project Nexus.