A group of seven central banks is collaborating with the Bank for International Settlements (BIS) to investigate the tokenization of cross-border payments through a project known as Project Agorá.
The initiative aims to partner with the private sector to explore how tokenized wholesale central bank money and commercial bank deposits on programmable platforms can enhance the monetary system. Building upon a unified ledger concept proposed by the BIS last year, the project will focus on integrating tokenized commercial bank deposits with tokenized wholesale central bank money within a public-private programmable core financial platform.
According to the BIS, this integration could improve the monetary system’s functionality and introduce new solutions utilizing smart contracts and programmability, all while preserving its two-tier structure. The primary goal is to increase the speed and integrity of international payments while reducing costs.
Participating central banks include the Bank of France, Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank, Bank of England, and the Federal Reserve Bank of New York. They will collaborate with a broad group of private financial firms organized by the Institute of International Finance.
Cecilia Skingsley, head of the BIS Innovation Hub, stated, “Today, numerous payment systems, accounting ledgers, and data registries require complex integrations. In Project Agorá, we aim to explore a new common payment infrastructure that could unify these components and enhance system efficiency on a digital core financial platform.
“We will not only test the technology but also assess it within the specific operational, regulatory, and legal conditions of the participating currencies, alongside financial institutions operating in those markets.”