The Bank for International Settlements (BIS) has launched a new initiative called Project Agorá in collaboration with a consortium of private financial institutions. This project aims to explore the potential of tokenization to enhance existing financial systems by combining wholesale versions of tokenized central bank money and commercial bank deposits onto a unified, programmable platform. Project Agorá involves seven monetary authorities from different regions, such as the U.K., Japan, South Korea, Mexico, Switzerland, New York, and Europe, in partnership with private financial firms. The primary goal is to address challenges in cross-border payments caused by various legal, regulatory, and technical frameworks, operational hours, and time differences.
The BIS plans to issue detailed instructions and requirements for participation in Project Agorá, giving private banks a grace period to join the collaboration. The project will focus on exploring seamless integration between tokenized commercial bank deposits and wholesale central bank money within a public-private programmable financial platform. Central to this integration are smart contracts, which will enable automatic transaction execution and improve the functionality of the monetary system while preserving the established two-tier structure. Tokenization, the process of digitizing real-world assets into tokens, has gained traction among financial institutions globally, with the potential to revolutionize the financial sector.
HSBC recently announced its venture into tokenizing gold for investors in Hong Kong, while the market value of tokenized U.S. Treasury notes on public blockchains exceeded $1 billion for the first time in March. The BIS is also focusing on developing a more efficient payment infrastructure to unify various payment systems through Project Agorá. The project aims to test the technology within the operational, regulatory, and legal conditions of the participating currencies, in collaboration with financial companies operating in those regions. Hyun Song Shin, BIS head of research, emphasized the ambitious goal of Project Agorá to achieve practical usability and meaningful impact by leveraging existing infrastructure.
The BIS announced its work program for the year, featuring six new projects exploring cybersecurity, fighting financial crime, central bank digital currencies (CBDCs), and green finance. One of these projects, Project Promissa, is a collaboration between the BIS, the Swiss National Bank, and the World Bank, aiming to develop a proof-of-concept platform for digital tokenized promissory notes. The BIS has been a strong advocate for CBDCs and digital innovation, with concerns about stablecoins. Agustín Carstens, the BIS’s general manager, has urged central banks worldwide to lead digital innovation, identifying CBDCs as a central element of this leadership. Project Agorá and other initiatives by the BIS demonstrate a commitment to exploring new technologies and enhancing financial systems to meet the evolving needs of the digital economy.
