BIS Launches Project Agorá to Streamline International Payments

18 Sept

The Bank for International Settlements (BIS) has announced the launch of the design phase of Project Agorá, an initiative aimed at enhancing the efficiency of international payments and developing programmable financial platforms. The project, which began in April, involves 41 private companies from the financial sector and collaboration with seven central banks. Among the companies participating are major players such as Visa, Mastercard, SWIFT, JPMorgan Chase, HSBC, SIX Digital Exchange, and Monex.

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Project Agorá's primary goal is to explore the integration of tokenized commercial bank deposits with central bank digital currencies (CBDCs) on a unified financial platform. The project builds on the BIS's "unified ledger" concept, which is designed with open architecture, interoperability, and programmability in mind. This unified ledger will house distinct sections for CBDCs and tokenized bank deposits, using smart contracts to facilitate interactions between them. It will also allow for communication across different unified ledgers, potentially transforming cross-border transactions.

The project focuses on improving customer verification and anti-money laundering (AML) procedures, which currently involve multiple intermediaries repeating these checks during a transaction. Streamlining this process could reduce duplication and significantly increase the efficiency of the global payment system.

The central banks involved in Project Agorá include the Bank of France (representing the Eurosystem), the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, the Bank of England, and the Federal Reserve Bank of New York. These central banks and participating companies are also tasked with identifying legal and regulatory challenges associated with tokenization and CBDCs in their respective jurisdictions.

The Institute of International Finance (IIF), a global financial industry representative, has been appointed to coordinate the participation of private companies. A final report on Project Agorá is expected by the end of 2025, detailing the findings and potential pathways to improve international payment systems through tokenized deposits and CBDCs.

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