Transforming Cross-Border Payments Through Digital Innovation

November 2025 marks the end of the Swift MT-MX co-existence phase, which will see the adoption of ISO 20022 XML messaging in the interbank space for cross border payments. Whilst this Swift migration represents possibly the most significant disruption to traditional global cross border payments since Swift first introduced electronic financial messaging back in 1977, ultimately this is just a message format change, which still fails to address some of the key challenges around cross border payments. In this latest article from Eliane Eysackers and Mark Sutton, they provide a recap on the remaining challenges with cross border payments in addition to focusing on the rapidly evolving payments landscape, which will redefine what is possible.  

Background

Whilst the evolution of the payments industry over the past twenty years has been significant, both in terms of the number of available payment methods and how payments can now be made, the intensity of focus increased significantly when the G20 endorsed the Roadmap for Enhancing Cross-border Payments¹ in 2020. The G20 made enhancing cross-border payments a priority – specifically making cross-border payments, including remittances, faster, cheaper, more transparent and inclusive.

Friction will remain with the legacy Correspondent Banking Model

Post the Swift MT-MX migration, the correspondent banking model will remain an essential part of the cross border payments flows. Underpinned through a foundation of bilateral agency agreements, whereby one bank maintains a physical bank account (and deposits) with another (correspondent) bank, corporate treasury will continue to experience friction in the following areas:

The Digitization of Money – Taking Cross Border Payments to the Next Level

The race is now on as the rapid evolution of technology provides the opportunity for greater speed, transparency and efficiency within the cross-border payments domain. There are a number of projects at different stages of maturity that leverage distributed ledger technology to support the digitisation of cross border transactions:

• BIS Project m-Bridge (2021-2024)

Originally launched by the Bank for International Settlements (BIS) in collaboration with the central banks of China, Hong Kong, and the United Arab Emirates, this project aimed to create a multi-central bank digital currency (m-CBDC) platform that addressed key inefficiencies in cross-border payments, including high costs, low speed and operational complexities. Furthermore, this platform would be fully compliant with jurisdiction-specific policy and legal requirements. However, the 2024 BRICS summit also included Egypt, Ethiopia, Iran, and the United Arab Emirates as members², with the agenda including a discussion around the creation of a BRICS Bridge which would be based on m-bridge technology. Recognising that a BRICS Bridge offered the potential for some independence against US supervised financial systems and the current restrictions to Swift, the BIS announced in October 2024 that mBridge had reached the minimum viable product (MVP) stage in mid-2024 and that it was now handing over to the participating central banks to carry the project forward.  

With the technology proven and China at the helm, we are now hearing some news about Chinese banks executing cross border payments using mBridge³. We should expect transactional volumes to increase through 2025 and assuming this project is viewed as a success, an expansion across parts of Asia and possibly the Middle East Region given the participating central banks⁴.

• Project Agorá (2024 - now)

Commencing in April 2024, Project Agorá is the BIS Innovation Hub’s largest and most complex project in geographical scope and number of participants. The project’s main objective is to demonstrate how a unified ledger could enhance the efficiency of business and regulatory processes in correspondent banking payment chains, thereby reducing transaction times and costs, enhancing payment transparency, and mitigating risks for banks involved in cross-border payments.

The project aims to build a technical prototype to test wholesale cross-border payments to demonstrate the following:

1. The ability to represent tokenised commercial and wholesale central bank money on a unified ledger that meets technical and business requirements.
2. Atomic cross-border transactions between currency areas leveraging a single currency pair or a vehicle currency in a way that preserves depositor-bank relationships.
3. The ability to streamline pre-validation efforts, e.g. reducing duplication of efforts, in the payment chain without changing existing standards and requirements.
4. Improved efficiencies in complying with sanctions screening as well as anti-money laundering and rules on countering the financing of terrorism.

This project brings together seven central banks⁵ which will work in partnership with 42 financial services companies⁶ and convened by the Institute of International Finance (IIF)⁷. Project Agorá aims to go beyond proof of concept and deliver a prototype to test a range of potential current and future use cases. The lessons learned during the project may set out a path for a new type of financial market infrastructure tailored to cross-border payments based on new technology.

The project is currently in its final design phase, which will then allow the BIS to issue an RFP to choose a technology partner. A project report is expected to be published by the end of 2025.

• Partior (2021 - now)

Singapore based Partior is a blockchain-based fintech, which is offering a next-generation atomic settlement network for cross-border wholesale payments. Founded in 2021, it was announced as the winner of the 2022, G20 Indonesia Techsprint challenge on CBDCs. Backed by DBS Bank, J.P. Morgan, Standard Chartered, Temasek, and Peak XV, it processed over USD 1 billion in transaction value in November 2024⁸, marking a significant milestone in the company's journey to deliver instant cross-border transactions for financial institutions.

Banks either using or partnering with Partior include its founders DBS Bank, JP Morgan, and Standard Chartered, along with Deutsche Bank, Emirates NBD, and Nonghyup Bank, who are using it to facilitate real-time, cross-border payments and settlement, often involving tokenized commercial bank money to address inefficiencies like settlement delays, limited transparency, and high operating costs in the global financial market by removing intermediaries.

Whilst Partior's platform currently supports USD, EUR, and SGD, there are plans to integrate additional currencies combined with expanding its network across the Americas, EMEA, and Asia.

• Regulated Liability Network (2021 - now)

With origins dating back to the 2021 Monetary Authority of Singapore (MAS) global CBDC solutions challenge, the evolution continued in 2024 with UK Finance announcing work on a new UK Regulated Liability Network (RLN) experimentation phase with eleven of its members⁹. This was completed during Q3 2024 and explored the possible benefits of tokenisation, distributed ledger technology (DLT), and programmable money.

The focus earlier this year was on the technology build, test, and delivery for a pilot phase. Developing the technology framework included the orchestration layer, associated tokenised deposit and shared ledger systems. The objective is to build a regulated financial market infrastructure using distributed ledger technology (DLT) to enable new digitised payment and settlement capabilities. In September 2025, UK Finance issued a press release¹⁰ confirming a pilot will run until mid-2026 with the objective of demonstrating tangible benefits to customers, businesses and the wider UK economy.

• J.P. Morgan launches USD Deposit Token, JPMD (June 2025)

In addition to the various industry collaborations, we are also seeing commercial banks developing solutions that will address the current friction in the cross-border payments space as well as enhancing existing payment capabilities. J.P. Morgan introduced the JPMD deposit token in a proof-of-concept launch on the ^{24th of} June, 2025, on the Base public blockchain, developed by Coinbase¹¹. The JPMD token serves as a digital representation of commercial bank money and is an alternative to stablecoins for J.P. Morgan's institutional clients. Whilst Deposit Tokens and stablecoins can be applied to similar use cases, Deposit Tokens differ from stablecoins in key areas including, interest payouts, and deposit treatment.

What are the Benefits of Digitized Cross Border Payments?

Harnessing new digitised cross border payment rails that are underpinned with distributed ledger technology and smart contracts will address the legacy frictions arising from the separation of messaging, clearing and settlement. Benefits include the following:

• Atomic settlement: Has emerged with the advent of blockchain technology and distributed ledger systems. Whilst the legacy settlement processes often involves multiple intermediaries and can take days to complete - which expose participants to counterparty and settlement risks, atomic settlement enables instant and simultaneous completion of a series of transactions, ensuring instant and irrevocable value transfers, importantly eliminating settlement risk.

• Faster processing speed: Industry analysis of Swift versus RippleNet highlighted RippleNet settles payments in 3–5 seconds using XRP, while Swift can takes days due to the use of intermediaries. Swift only handles messaging; the actual fund movement depends on multiple banks and currencies.

• Reduced cost: Fewer intermediaries are involved in the cross-border payment processing chain.  

Lastly, these new digitised payment rails will support programmable payments, enabling the contingent performance of actions through smart contracts, for example only release payment when the goods have been received.  

Conclusion

The world is witnessing significant growth in cross-border payments, which has been driven by the globalization of trade, capital and migration flows. Global payments are expected to increase from USD 190 trillion in 2023 to USD 290 trillion by 2030¹². Streamlining international transactions by reducing settlement times, certainty, cost and risk is now becoming a strategic imperative.

However, the above selected projects represent just a few of the initiatives underway at the moment as the digital payments landscape continues to evolve. Whilst it does look like a fragmented digital payments landscape will be the ultimate outcome, what is clear is that programmable payments and smart contracts can enable new ways of atomic settlement, unlocking new value-added solutions that are simply not possible or practical under current payment rails. These new digital payment rails will eliminate the legacy inefficiencies that exist today with cross border payments, reducing costs, and providing atomic settlement. The future of cross border payments is now looking faster and smarter.