Seven central banks and more than 40 leading financial institutions from around the world have successfully tested a blockchain-based platform for cross-border payments as part of Project Agorá.
The Bank for International Settlements (BIS) and the Institute of International Finance (IIF) have published the results of Project Agorá, an experimental platform for cross-border interbank payments based on tokenized central bank reserves and commercial bank deposits.
Project Agorá demonstrated the feasibility of conducting international settlements on a shared programmable platform using distributed ledger technology (DLT). According to the developers, the system can reduce payment processing times to just a few seconds after funds are locked and lower settlement risk through atomic transaction execution.
The platform was developed over a two-year period under the coordination of BIS and the IIF. Participating central banks included those of the United Kingdom, Japan, South Korea, Mexico, Switzerland, France (on behalf of the Eurosystem), and the Federal Reserve Bank of New York. More than 40 banks and financial institutions joined the initiative, including Citi, HSBC, Deutsche Bank, JPMorgan, Santander, UBS, Mastercard, Visa, and SWIFT.
Agorá is built around the concept of a unified ledger that combines tokenized central bank reserves with tokenized commercial bank deposits. The platform’s architecture consists of two layers:
- A shared layer for recording tokenized commercial bank deposits.
- Separate national ledgers for tokenized central bank reserves.
According to the report, the new model can address several long-standing challenges in cross-border payments, including:
- Faster settlement through parallel data verification and process automation.
- Reduced operational and settlement risk through atomic transaction execution.
- Greater transparency through real-time payment status tracking.
- Round-the-clock operation regardless of time zones or domestic payment system schedules.
- Improved data quality through the use of ISO 20022 standards and Legal Entity Identifiers (LEIs).
The developers noted that the platform preserves the existing correspondent banking model while making it more efficient through tokenization and smart contracts. The system can also support conditional payments and other automated settlement scenarios.
BIS estimates that the cross-border payments market reached $195 trillion in 2024 and could grow to $320 trillion by 2032. Wholesale interbank transactions account for approximately 91% of the total volume.
A legal assessment of the project found that the use of tokenized reserves and deposits does not alter the legal nature of money and could be implemented within existing regulatory frameworks in participating jurisdictions. However, broader deployment will require further work on governance, cybersecurity, liquidity management, and regulatory considerations.
Project participants expressed interest in continuing work on Agorá and further exploring the role of tokenization in international payments.
Project Agorá was launched in April 2024 to explore the tokenization of wholesale CBDCs and commercial bank deposits, as well as the creation of a programmable platform enabling their interaction. Six months after launch, the initiative was significantly expanded with the addition of new participants.
