BIS Announces Project Agorá: Central Banks Bet on Tokenization for Cross Border Settlements
7 banks will be involved in Agorá: 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. Private institutions determined by the IIF will be integrated into this public-private collaboration
BIS to Explore Tokenized Money Benefits With Project Agorá
The Bank for International Settlements (BIS), an institution that facilitates international cooperation for central banks, has unveiled Project Agorá, an initiative aiming to explore the possibilities of tokenization for addressing the limitations of today's monetary systems.
Seven central banks will be involved in Agorá: 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. Complementing the group, private institutions determined by the Institute of International Finance (IIF) will be integrated into this public-private collaboration later.
Project Agorá will focus primarily on testing the utilization of tokenized deposit-backed products, and wholesale central bank digital currencies (CBDC) as vehicles to simplify the burdens of making cross-border settlements. The BIS seeks to assess if this two-tiered mixed structure can "enhance the functioning of the monetary system and provide new solutions using smart contracts and programmability."
Agorá is a practical application of part of BIS' "unified ledger" model, which proposes a structure where tokenized deposits, central bank money, and other tokenized assets are available in one decentralized ledger. This would enable functionality that is impractical today due to the characteristics of the monetary system and its controls.
