The cross-border transfer market reached $182 trillion in 2022. However, the G20 has identified four critical areas — cost, speed, access, and transparency - that need improvements. The banks are working with digital asset infrastructure startup Progmat and blockchain firm Datachain to see whether stablecoins can address these issues. Project Pax’s cross-border transfer platform will use stablecoins and blockchains instead of correspondent banks. However, it will also use Swift’s existing API framework for banks to instruct Progmat to settle on blockchain networks. This, say the participants, is because, for cross-border remittances in the real economy the roles of Swift and banks remain crucial due to considerations such as AML/CFT, regulatory compliance, operational frameworks, and the challenges businesses face in using wallets.

The pilot will begin shortly, with plans to expand collaboration to more countries and financial institutions ahead of a possible commercial launch next year.