New BIS Project Explores Wholesale CBDC for Faster, Cheaper Cross Border Payments

New BIS Project Explores Wholesale CBDC for Faster, Cheaper Cross Border Payments

by June 5, 2024

The Bank for International Settlements (BIS) has launched Project Rialto to test the potential for improving instant cross-border payments through a combination of a modular foreign exchange (FX) component and wholesale central bank digital currencies (wCBDC).

Enhancing cross-border payments is a significant international policy objective and a priority for the G20.

Currently, FX services provided by correspondent banks are often costly, slow, and complex, posing liquidity, credit, and settlement risks to participants.

Decentralised solutions, CBDC, and interconnected payment infrastructures offer promising paths to improve cross-border payments.

Project Rialto aims to explore how these elements can interact to advance global payment systems.

This initiative is a collaboration between the BIS Innovation Hub Eurosystem and Singapore Centres, in partnership with several central banks.

It aims to develop a new automatic FX settlement layer using wCBDC as a secure settlement asset for interconnected instant payment or digital asset systems.

The name “Rialto” refers to the famous bridge in Venice, symbolizing the project’s goal of bridging the gap in cross-border payment infrastructure, and its role as a marketplace, representing the automatic FX settlement using wCBDC.

 

Featured image credit: Edited from Freepik