Project Agorá advances into real-value payment testing

Project Agorá has shown that tokenisation can improve wholesale cross-border payments. The next phase will move into real-value testing with selected currencies and participants.

The prototype tested whether tokenised central bank reserves and tokenised commercial bank deposits could support cross-border transactions on a shared programmable platform. It found that wholesale transactions can be settled atomically, meaning payment chains are completed all-or-nothing across currencies and jurisdictions.

The initiative brings together the Bank for International Settlements, the Institute of International Finance, seven central banks involved in the prototype and more than 40 private-sector financial institutions. The central banks are the Bank of England, the Federal Reserve Bank of New York, the Bank of France representing the Eurosystem, the Bank of Japan, the Bank of Korea, the Bank of Mexico and the Swiss National Bank.

The Bank of Canada has now joined the project as it enters its next phase. That stage is expected to give private-sector institutions a bigger role alongside the participating central banks.

Prototype findings

The report says the system's design allows central banks to retain control over their currencies and domestic operations while connecting to a common platform. That matters because cross-border payment reform has often run into concerns over sovereignty, governance and operational control.

It also says privacy can be protected at both the balance and transaction levels while still supporting regulatory compliance. In this model, tokenisation does not change the legal character of central bank reserves or commercial bank deposits.

Legal analysis for the project found that settlement finality is achievable across all seven participating jurisdictions. At the same time, it identified a need for further technical, operational and contractual development to align the model with legal frameworks in each market.

Cross-border frictions

Wholesale cross-border payments remain slower and more complex than domestic transfers, particularly when transactions involve several intermediaries, time zones and currency systems. Financial institutions and policymakers have spent years trying to reduce delays, cut reconciliation work and lower settlement risk without undermining central bank oversight.

Project Agorá focuses on the wholesale market rather than retail consumer payments. Its model uses tokenised forms of money already held within the existing financial system rather than creating a new private payment asset.

The report says the modular structure could also support conditional payments and always-on arrangements. It points to possible extensions in areas including anti-money laundering, counter-terrorism financing, sanctions compliance and fraud detection, subject to the development of regulatory and data-sharing frameworks.

The project is therefore testing more than a simple payment rail. It is exploring whether a common infrastructure can handle settlement while supporting the compliance and control features that large financial institutions and central banks require for cross-border transactions.

Public-private model

The initiative's structure is notable for combining central bank involvement with direct participation by private-sector institutions. That reflects the practical reality of wholesale payments, where commercial banks handle much of the transaction flow even when final settlement depends on central bank money.

By including both public and private participants, the project has sought to test whether a shared platform can work across institutional and national boundaries. The next stage, involving real-value transactions in selected currencies, is likely to be watched closely by policymakers and market participants because it will take the work beyond a prototype environment.

The report describes the project as evidence that multi-currency settlement using tokenised central bank reserves and tokenised commercial bank deposits can be carried out safely and securely. It also says atomic settlement is achievable with security and finality across currencies and jurisdictions.

For central banks, one key question is whether the model can improve efficiency without weakening their authority over issuance, liquidity and domestic settlement arrangements. For banks, the issue is whether such a framework can reduce friction in correspondent banking and other wholesale payment processes while fitting within existing legal and compliance obligations.

The addition of the Bank of Canada broadens official-sector backing for the work. The project now moves into further testing after concluding that settlement finality is achievable across all seven original participating jurisdictions.