Key Takeaways:
Seven central banks and more than 40 financial institutions settled cross-border wholesale payments in seconds using tokenized central bank reserves and commercial bank deposits, the BIS said Wednesday.
The Bank for International Settlements and seven central banks settled cross-border wholesale payments in seconds using a tokenized prototype, a report published Wednesday showed, marking one of the broadest collaborations between central banks and private lenders on blockchain-based settlement.
"Project Agorá demonstrates that tokenized central bank reserves and commercial bank deposits can be combined on a shared ledger to achieve atomic settlement, eliminating credit and settlement risk," the BIS said in the report.
The prototype processed transactions in seconds once liquidity was locked, using a two-layer blockchain architecture that combined tokenized central bank reserves on jurisdictional ledgers with tokenized commercial bank deposits on a shared unifying ledger. The system enabled anti-money laundering, sanctions and fraud screening to run in parallel rather than sequentially, which the BIS said could reduce the high false-positive rates that burden existing cross-border payment networks. Participating central banks included the Banque de France representing the Eurosystem, the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, the Federal Reserve Bank of New York and the Bank of England, alongside more than 40 regulated financial institutions including JPMorgan, UBS, Visa and Mastercard.
Cross-border payments totaled $195 trillion in 2024 and are projected to reach $320 trillion by 2032, according to FXC Intelligence data cited in the report. The project is now advancing to real-value testing with actual transactions, though the BIS did not provide a timeline for commercial implementation.
How the Two-Layer Architecture Works
The platform preserved the "two-tier banking system" and safeguarded the "singleness of money," which the BIS called "fundamental to financial stability," distinguishing the project from stablecoin alternatives. Tokenized central bank reserves operated on jurisdictional ledgers while tokenized commercial bank deposits moved on a shared unifying ledger, with smart contracts automating compliance rules and payment conditions directly into transactions. The BIS said operational frictions remain one of the largest problems in global payments today, with institutions using different systems and verification processes that cause delays. The new system could enable around-the-clock settlement, mitigating delays caused by misaligned operating hours across jurisdictions.
Next Steps and Governance
The report identified areas requiring further development, including liquidity saving mechanisms, cybersecurity posture and governance frameworks covering settlement finality, data governance and risk management. The BIS did not provide an exact date for full commercial implementation, but the move into real-value testing marks a significant milestone for the initiative. If successful, Project Agorá could reshape global cross-border settlement systems over the coming years, potentially lowering transaction fees and enhancing the speed and transparency of settlements.
This article is for informational purposes only and does not constitute investment advice.
