The Bank for International Settlements Innovation Hub published an interim report on Project Rialto, setting out the policy and technical considerations for a proof of concept aimed at improving instant retail cross-border payments by combining interlinked instant payment systems with an automated foreign exchange conversion layer that settles in tokenised central bank money. The report frames the project around FX- and settlement-related frictions in a retail cross-border payments market exceeding USD 800 billion in annual transaction value, where costs, speed, access and transparency lag domestic payments. Project Rialto’s proposed architecture routes retail payments through domestic instant payment systems, while currency conversion and payment-versus-payment settlement occur on a transnational tokenised network using central bank money as the settlement asset, with the aim of simplifying the payment chain and reducing liquidity, credit and settlement risks. The interim report also highlights integration challenges when connecting legacy payment systems to a tokenised settlement platform, and flags broader constraints including governance and legal jurisdiction, AML/CFT and sanctions compliance, fraud risks in instant payments, exchange rate volatility, currency controls, price discovery and liquidity, and scalability and cyber resilience. Next steps focus on developing the proof of concept and conducting experiments, with the final report expected to describe the build details and findings. The project is a collaboration involving the BIS Innovation Hub Eurosystem and Singapore Centres, the Bank of France, the Bank of Italy, Bank Negara Malaysia and the Monetary Authority of Singapore.

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