The Bank for International Settlements (BIS) has released the final report on Project Agorá, a two-year experimental prototype that demonstrates how tokenized central bank reserves and commercial bank deposits can settle cross-border wholesale payments in seconds. The project, one of the broadest collaborations between central banks and private financial institutions to date, involved seven central banks and more than 40 regulated financial entities.
How Project Agorá works
Project Agorá uses a two-layer blockchain architecture. Tokenized central bank reserves operate on separate jurisdictional ledgers, while tokenized commercial bank deposits function on a shared unifying ledger. This setup enables atomic settlement, meaning all balance updates occur simultaneously or not at all, significantly reducing credit and settlement risk compared to traditional sequential processing.
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The BIS emphasized that the design preserves the two-tier banking system and maintains the singleness of money, which it described as fundamental to financial stability. This distinction sets the project apart from stablecoin-based alternatives that operate outside the traditional banking framework.
Addressing the high cost of cross-border payments
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 current system is slow, costly, and opaque, with transactions often taking days to settle due to mismatched operating hours, multiple intermediaries, and sequential compliance checks.
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Project Agorá addresses these inefficiencies by allowing anti-money laundering, sanctions, and fraud screening to occur in parallel rather than sequentially. The BIS noted that this approach could reduce the high false-positive rates that plague today’s cross-border payment infrastructure.
Real-time visibility and 24/7 operation
The platform is designed to operate around the clock, eliminating delays caused by misaligned operating hours across jurisdictions. Settlement occurs in seconds once funds are locked. All parties to a transaction have access to real-time payment status, while privacy is maintained for non-participating entities. The BIS indicated that, in the future, such visibility could be extended to end users, including debtors and creditors.
Moving to real-value testing
Project Agorá is advancing to real-value testing with actual transactions involving certain currencies and participants. However, the BIS did not provide a specific timeline for broader implementation. The report identified several areas requiring further development, including liquidity saving mechanisms, cybersecurity posture, and governance frameworks covering settlement finality, data governance, and risk management.
Participating central banks include 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 (via its New York Innovation Center), and the Bank of England.
Why this matters
Project Agorá represents a significant step toward modernizing the global payments infrastructure. If successfully implemented, it could reduce costs, speed up settlement times, and increase transparency for financial institutions and their customers. The project also signals growing central bank interest in tokenization as a tool for improving wholesale payment systems, distinct from retail-focused central bank digital currencies.
The Bank of England recently proposed extending settlement hours for its RTGS and CHAPS systems, with Deputy Governor Sarah Breeden noting that shared ledgers and tokenization could make payments and settlement faster and cheaper, with fewer intermediaries and shorter settlement windows.
Conclusion
Project Agorá demonstrates that tokenized wholesale payments can settle in seconds while maintaining the core principles of the existing banking system. As the project moves to real-value testing, its outcomes could shape the future of cross-border financial infrastructure. The BIS has not yet provided a timeline for full implementation, but the prototype offers a concrete path toward faster, cheaper, and more transparent international payments.
FAQs
Q1: What is Project Agorá?
Project Agorá is a BIS-led experiment involving seven central banks and over 40 financial institutions to test tokenized cross-border wholesale payments using a two-layer blockchain architecture.
Q2: How fast can payments settle under Project Agorá?
Settlement occurs in seconds once liquidity is locked, compared to the current system that can take days.
Q3: Is Project Agorá the same as a central bank digital currency?
No. Project Agorá focuses on wholesale interbank payments, not retail CBDCs for the general public. It uses tokenized central bank reserves and commercial bank deposits within the existing two-tier banking system.
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