The Bank for International Settlements (BIS) is an international financial institution that acts as a central bank for central banks, helping to promote global financial and monetary stability. Founded in 1930, it facilitates cooperation among central banks, provides a platform for discussion on key economic issues, and conducts research that influences global financial policies. The BIS also plays a crucial role in setting global banking regulations, such as the Basel Accords, and offers financial services to central banks, helping manage risk and ensure financial stability on a global scale.
On 16 September 2024, the Bank for International Settlements (BIS) announced that more than 40 private-sector financial firms would join Project Agorá, a blockchain-based initiative designed to improve wholesale cross-border payments. The selected companies, which include industry leaders such as JPMorgan Chase & Co., Deutsche Bank AG, Visa, and Mastercard, were convened by the Institute of International Finance (IIF) and will collaborate with seven central banks, including the Federal Reserve Bank of New York, the Bank of England, and the Bank of Japan, among others.
Project Agorá, launched by the BIS in May 2024, focuses on exploring how tokenization—the process of turning traditional financial assets into digital tokens that can be traded on a blockchain—can improve the speed, transparency, and security of international payments. The project’s overarching goal is to establish a unified ledger that integrates tokenized commercial bank deposits with central bank digital currencies (CBDCs), offering a more efficient alternative to traditional correspondent banking systems.
According to the BIS, tokenized assets, such as commercial bank deposits and CBDCs, are at the heart of the project. Tokenized commercial bank deposits represent a digital form of traditional bank accounts backed by reserves and traded using blockchain technology. CBDCs, meanwhile, are digital currencies issued by central banks, allowing for secure, nearly risk-free transactions across borders. According to the BIS, these two types of tokenized assets could streamline cross-border financial transactions and reduce operational risks.
The private firms joining the project bring a range of expertise in cross-border payments, blockchain technology, and financial innovation. According to the BIS, the addition of these firms marks a crucial phase in Project Agorá’s development, as they help the central banks design a programmable platform that allows for the seamless integration of tokenized assets. This platform is expected to use smart contracts to automate payment processing and settlement, reducing the need for intermediaries and cutting transaction costs.
As the BIS explained in its FAQ guide for Project Agorá, the goal is to create a unified platform that maintains the existing two-tier structure of the global financial system—where central banks issue currency, and commercial banks act as intermediaries—while integrating the benefits of blockchain technology. This new system could dramatically improve the speed and efficiency of cross-border payments, addressing longstanding issues such as high fees and long processing times, the BIS notes.
The project is currently in its design phase, with the BIS expecting a final report by the end of 2025. According to the FAQ guide, this report will outline the technical prototype, along with potential legal and regulatory challenges in each of the participating jurisdictions. The findings from Project Agorá could lay the groundwork for a future blockchain-based global payment system that reduces operational friction and enables programmable financial transactions across borders.
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