Originally published on: September 16, 2024
The Bank for International Settlements (BIS) has initiated Project Agora, a groundbreaking endeavor aimed at creating a unified platform for integrating tokenized commercial bank deposits with tokenized wholesale central bank digital currencies (CBDCs). The project, which was officially launched in April with the collaboration of seven central banks, has gained significant traction with the onboarding of 41 private financial firms for the design stage.
Among the prestigious private-sector participants are industry giants such as Visa, Mastercard, SWIFT, the Swiss SIX Digital Exchange, Japan’s Monex Group, and several major banks and clearing companies. The Institute of International Finance has been selected to rally the private participants, who eagerly responded to a call for involvement issued in May.
Notably, Project Agora has now become the largest BIS initiative in terms of participants, surpassing all previous endeavors. The private-sector entities will work alongside central banks including the Bank of France, Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank, Bank of England, and the Federal Reserve Bank of New York on this innovative project.
The primary objective of Project Agora is to address the “structural inefficiencies” inherent in the current international payments system by leveraging the unified ledger concept developed by BIS. Specifically focusing on customer verification and Anti-Money Laundering processes, the project aims to streamline transactions by eliminating the need for repetitive checks by intermediaries.
BIS head, Agustin Carstens, described the unified ledger envisioned by the organization as an open architecture with programmability and composability. In this system, CBDCs and tokenized deposits would reside in distinct sections of a ledger, interacting through smart contracts. The potential for multiple unified ledgers to communicate with each other further highlights the transformative nature of this initiative.
In addition to technical development, project participants will also tackle legal and regulatory challenges across the represented jurisdictions to facilitate the seamless integration of tokenization and CBDC within the financial ecosystem. Project Agora is slated to continue until the end of 2025, culminating in the release of a comprehensive final report.
Explore the possibilities of a unified financial future with Project Agora, where innovation and collaboration pave the way for a more efficient and effective global payments landscape.
