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A consortium of seven central banks has partnered with the Bank for International Settlements (BIS) to delve into the realm of tokenisation for cross-border payments.
These central banks are pooling their efforts with the private sector for Project Agorá, an initiative aimed at exploring the potential of tokenising wholesale central bank money and commercial bank deposits on programmable platforms to enhance the monetary system.
Building upon the unified ledger concept proposed by the BIS in the previous year, Project Agorá seeks to investigate the seamless integration of tokenised commercial bank deposits with tokenised wholesale central bank money on a public-private programmable core financial platform.
According to the BIS, this approach could bolster the efficiency of the monetary system, offering novel solutions through smart contracts and programmability while upholding its established two-tier structure.
The primary objective of Project Agorá is to accelerate the speed and reliability of international payments while simultaneously reducing associated costs.
Participating in this groundbreaking endeavor are 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. These central banks will collaborate with a consortium of private financial firms convened by the Institute of International Finance.
Cecilia Skingsley, Head of the BIS Innovation Hub, articulated the vision behind Project Agorá, stating: “Project Agorá aims to explore a novel common payment infrastructure that could streamline the integration of various payment systems, accounting ledgers, and data registries, potentially fostering greater operational efficiency within a digital core financial infrastructure.”
Skingsley emphasized that the project will not only test the technological capabilities but also evaluate its compatibility with the operational, regulatory, and legal frameworks of the participating currencies, in collaboration with financial institutions operating within these jurisdictions.
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