Tokenisation improves cross-border payments, Agorá moves to real-value tests
Project Agorá, a public-private collaboration led by the Bank for International Settlements (BIS), has demonstrated how tokenisation can address long-standing inefficiencies in wholesale cross-border payments. The project will now advance to real-value testing with certain currencies and participants, with the Bank of Canada joining.
Agorá's blueprint for efficiency
The Project Agorá prototype has shown the possibility of completing atomic settlement of wholesale cross-border transactions using tokenised central bank reserves and commercial bank deposits.
This is achievable securely and with finality across currencies and jurisdictions.
A layered architecture allows central banks to retain autonomy while ensuring interoperability.
Privacy can be safeguarded at both balance and transaction levels, and tokenisation does not alter the legal characterisation of reserves.
Legal analysis confirms settlement finality across seven participating jurisdictions, with further work needed on technical and contractual requirements.
The modular design also unlocks new capabilities like conditional and always-on payments, enhancing compliance frameworks.
From prototype to real-value testing
Project Agorá is a unique public-private collaboration convened by the BIS and the Institute of International Finance (IIF).
It involves the Bank of England, Federal Reserve Bank of New York, Bank of France (Eurosystem), Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank, and over 40 private sector financial institutions.
Participants have expressed strong interest in further exploring the prototype's benefits.
Future work will involve an enhanced private sector role, continued central bank engagement, and real-value transactions.
The Bank of Canada has joined, and additional private sector participation is anticipated.
Blueprint for a new payment era
Project Agorá provides a concrete, tested pathway for modernizing wholesale cross-border payments, addressing long-standing inefficiencies.
Its success hinges on overcoming complex legal and operational hurdles across diverse jurisdictions, requiring significant regulatory alignment.
While promising, widespread adoption will demand sustained industry commitment beyond the prototype phase.