diff --git a/src/batchPaymentOptimizer.ts b/src/batchPaymentOptimizer.ts
new file mode 100644
index 0000000..e8d2006
--- /dev/null
+++ b/src/batchPaymentOptimizer.ts
@@ -0,0 +1,166 @@
+import { EventEmitter } from 'events';
+
+export interface PaymentOperation {
+  id: string;
+  source: string;
+  destination: string;
+  amount: number;
+  currency: string;
+  metadata?: Record<string, unknown>;
+}
+
+export interface OptimizedBatch {
+  operations: PaymentOperation[];
+  totalAmount: number;
+  currency: string;
+  savings: number;
+}
+
+export interface BatchPaymentOptimizerOptions {
+  /** Minimum number of operations required to form a batch. */
+  minBatchSize?: number;
+  /** Whether to merge operations sharing the same source/destination/currency. */
+  mergeDuplicates?: boolean;
+}
+
+export type BatchPaymentOptimizerEvent =
+  | 'optimization:start'
+  | 'optimization:progress'
+  | 'optimization:complete'
+  | 'optimization:error';
+
+export interface OptimizationStartPayload {
+  operationCount: number;
+}
+
+export interface OptimizationProgressPayload {
+  processed: number;
+  total: number;
+}
+
+export interface OptimizationCompletePayload {
+  batches: OptimizedBatch[];
+  originalCount: number;
+  optimizedCount: number;
+}
+
+export interface OptimizationErrorPayload {
+  error: Error;
+}
+
+const DEFAULT_OPTIONS: Required<BatchPaymentOptimizerOptions> = {
+  minBatchSize: 1,
+  mergeDuplicates: true,
+};
+
+/**
+ * Batch payment optimizer.
+ *
+ * Groups and merges payment operations into optimized batches, reducing the
+ * number of on-chain/network operations while preserving net value.
+ */
+export class BatchPaymentOptimizer extends EventEmitter {
+  private readonly options: Required<BatchPaymentOptimizerOptions>;
+
+  constructor(options: BatchPaymentOptimizerOptions = {}) {
+    super();
+    this.options = { ...DEFAULT_OPTIONS, ...options };
+  }
+
+  /**
+   * Optimize a list of payment operations into batches.
+   * Emits lifecycle events throughout the optimization process.
+   */
+  public optimize(operations: PaymentOperation[]): OptimizedBatch[] {
+    this.emit('optimization:start', {
+      operationCount: operations.length,
+    } satisfies OptimizationStartPayload);
+
+    try {
+      const merged = this.options.mergeDuplicates
+        ? this.mergeOperations(operations)
+        : [...operations];
+
+      const batches = this.groupIntoBatches(merged);
+
+      this.emit('optimization:complete', {
+        batches,
+        originalCount: operations.length,
+        optimizedCount: batches.reduce(
+          (sum, batch) => sum + batch.operations.length,
+          0,
+        ),
+      } satisfies OptimizationCompletePayload);
+
+      return batches;
+    } catch (err) {
+      const error = err instanceof Error ? err : new Error(String(err));
+      this.emit('optimization:error', { error } satisfies OptimizationErrorPayload);
+      throw error;
+    }
+  }
+
+  /**
+   * Merge operations that share the same source, destination and currency
+   * by summing their amounts.
+   */
+  public mergeOperations(operations: PaymentOperation[]): PaymentOperation[] {
+    const merged = new Map<string, PaymentOperation>();
+
+    operations.forEach((operation, index) => {
+      const key = `${operation.source}|${operation.destination}|${operation.currency}`;
+      const existing = merged.get(key);
+
+      if (existing) {
+        merged.set(key, {
+          ...existing,
+          amount: existing.amount + operation.amount,
+        });
+      } else {
+        merged.set(key, { ...operation });
+      }
+
+      this.emit('optimization:progress', {
+        processed: index + 1,
+        total: operations.length,
+      } satisfies OptimizationProgressPayload);
+    });
+
+    return Array.from(merged.values());
+  }
+
+  /**
+   * Group merged operations into batches keyed by currency.
+   */
+  public groupIntoBatches(operations: PaymentOperation[]): OptimizedBatch[] {
+    const byCurrency = new Map<string, PaymentOperation[]>();
+
+    operations.forEach((operation) => {
+      const group = byCurrency.get(operation.currency) ?? [];
+      group.push(operation);
+      byCurrency.set(operation.currency, group);
+    });
+
+    const batches: OptimizedBatch[] = [];
+
+    byCurrency.forEach((group, currency) => {
+      if (group.length < this.options.minBatchSize) {
+        return;
+      }
+
+      const totalAmount = group.reduce((sum, op) => sum + op.amount, 0);
+      const savings = group.length > 1 ? group.length - 1 : 0;
+
+      batches.push({
+        operations: group,
+        totalAmount,
+        currency,
+        savings,
+      });
+    });
+
+    return batches;
+  }
+}
+
+export default BatchPaymentOptimizer;