The Bank for International Settlements (BIS) has released a comprehensive report on Project Agorá, an experimental prototype that demonstrates how tokenization can revolutionize cross-border wholesale payments. The project, a collaboration between seven central banks and more than 40 regulated financial institutions, showcases a system capable of settling international payments in seconds once liquidity is locked, while simultaneously reducing credit and settlement risks through atomic settlement mechanisms.
Project Agorá represents one of the broadest cooperative efforts between central banks and private lenders to date, exploring how tokenized central bank reserves and commercial bank deposits can be integrated on a shared blockchain infrastructure. The initiative targets the persistent inefficiencies of cross-border payments, which totaled $195 trillion in 2024 and are projected to reach $320 trillion by 2032, according to FXC Intelligence data cited in the report.
Project Overview and Objectives
The BIS, often described as the central bank for central banks, has been at the forefront of exploring digital currencies and tokenization. Project Agorá was convened jointly with the Institute of International Finance to address the slow, costly, and opaque nature of international transactions that burden global trade and financial activity. Traditional cross-border payments often take days to settle, involve multiple intermediaries, and suffer from high false-positive rates in anti-money laundering (AML) screening.
The project's name, Agorá, is derived from the ancient Greek word for a public gathering place or market, reflecting the goal of creating an open, efficient marketplace for payments. The report released on Wednesday details how the prototype achieves its objectives through a two-layer blockchain architecture.
Technical Architecture
Project Agorá employs a two-layer blockchain design. The first layer consists of tokenized central bank reserves on jurisdictional ledgers, meaning each participating central bank maintains its own ledger for its digital currency. The second layer is a shared unifying ledger where tokenized commercial bank deposits reside. This structure enables atomic settlement, a process in which all balance updates occur simultaneously or not at all. If any part of the transaction fails, the entire settlement is rolled back, eliminating settlement risk.
The BIS emphasized that this approach preserves the two-tier banking system, where central banks provide reserve money and commercial banks create deposit money for customers. By maintaining the singleness of money, meaning that central bank reserves and commercial bank deposits are interchangeable at par, the system safeguards financial stability. This design distinguishes Project Agorá from stablecoin alternatives, which often operate outside the regulated banking framework.
Importantly, the platform allows institutions to conduct AML, sanctions, and fraud screening in parallel rather than sequentially. The BIS noted that this parallel processing could significantly reduce the high false-positive rates that plague current cross-border payment systems, where legitimate transactions are often delayed or rejected incorrectly due to fragmented compliance checks.
Performance and Benefits
The prototype demonstrated that settlement occurs in seconds once funds are locked. The platform is designed to operate around the clock, mitigating delays caused by misaligned operating hours across different jurisdictions. In traditional systems, a payment initiated after the close of a clearing house may sit idle for hours or days. Project Agorá's 24/7 capability addresses this friction.
Transparency is another key benefit. All parties to a transaction have access to real-time payment status, while maintaining privacy from non-participating entities. The BIS report stated that in the future, such visibility could be extended to end users, including debtors and creditors, providing them with a clear view of payment progress.
By tokenizing central bank reserves, the system also opens possibilities for programmable payments and smart contracts. For example, conditional payments that release funds only when certain conditions are met could become seamless, further enhancing efficiency in trade finance and supply chain management.
Participating Institutions and Real-Value Testing
The central banks involved in Project Agorá 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. This diverse group reflects global interest in modernizing payment infrastructure.
The project is now advancing to real-value testing with actual transactions involving certain currencies and participants. However, the BIS did not provide a specific timeline for implementation. The report identified several areas requiring further development before full-scale deployment: liquidity saving mechanisms to minimize the amount of reserves needed for settlements, enhanced cybersecurity posture to protect the network from threats, and robust governance frameworks covering settlement finality, data governance, and risk management.
Broader Context and Implications
Project Agorá is part of a wider wave of innovation in central bank digital currencies (CBDCs) and tokenization. Earlier in May 2026, the Bank of England proposed extending settlement hours for its RTGS and CHAPS systems as part of a push toward near-24/7 settlement. Deputy Governor Sarah Breeden noted that shared ledgers and tokenization could make payments and settlement faster and cheaper, with fewer intermediaries and shorter settlement windows.
The BIS has also explored tokenization in other projects, such as Project Mariana for cross-border CBDC exchange and Project Helvetia for linking CBDCs to existing payment systems. Project Agorá builds on these efforts by directly involving commercial banks as active participants, ensuring that the solution integrates with the existing financial system.
The report's findings have implications beyond wholesale payments. If tokenized central bank reserves become mainstream, they could reshape monetary policy implementation, interbank lending, and even the structure of money itself. Central banks could potentially use programmable reserves to implement targeted stimulus measures or automate compliance with regulations.
Challenges and Future Roadmap
Despite the promising results, several hurdles remain. The report noted that liquidity saving mechanisms are still under development. In a system where settlement is atomic and near-instantaneous, the efficiency of liquidity usage becomes critical. Banks may need to hold larger buffers if netting and offsetting are not optimized. The prototype did not address how to handle liquidity shortages in a tokenized environment, a challenge that will need to be tackled before real-world deployment.
Cybersecurity is another major concern. A unified ledger shared by multiple central banks and dozens of commercial banks creates a tempting target for attackers. The BIS acknowledged that the system's security posture must be hardened, including protection against distributed denial-of-service attacks, smart contract vulnerabilities, and insider threats.
Governance also requires careful design. Questions of settlement finality, meaning the moment when a transaction becomes irreversible, must be resolved across different legal jurisdictions. Data governance is equally complex, as privacy regulations vary by country. The report indicated that these issues are being addressed through collaborative discussions with participating institutions and regulators.
The lack of a timeline for commercial implementation suggests that while the technical feasibility has been proven, the path to adoption will require significant coordination and policy alignment. Central banks may need to amend existing legal frameworks to recognize tokenized reserves as legal tender equivalent to traditional reserves.
Comparison with Stablecoins and Private Sector Initiatives
Project Agorá's architecture contrasts with stablecoin-based solutions offered by private companies. Stablecoins like USDC or USDT are typically issued on public blockchains and backed by reserves of fiat currency. However, they operate outside central bank direct control and often lack the singleness of money that Project Agorá preserves. The BIS has previously warned that dollar stablecoins could strain banks and policy by creating unbacked claims on central bank reserves.
By maintaining the two-tier system, Project Agorá ensures that central banks retain control over monetary policy and financial stability. Commercial banks remain the primary interface with customers, and deposits continue to be insured by national schemes. This approach is more likely to gain regulatory acceptance than private tokenization efforts.
The project also complements initiatives like the Financial Stability Board's roadmap for enhancing cross-border payments, which set targets for reducing costs, increasing speed, and improving transparency by 2027. Project Agorá demonstrates that these goals are technologically achievable within the existing regulatory framework.
Expert and Market Reactions
Industry analysts have praised Project Agorá for its pragmatic design. By focusing on wholesale payments, which account for the vast majority of transaction value, the project addresses the most critical pain points first. The involvement of major central banks lends credibility and could accelerate adoption.
However, some critics argue that the two-layer architecture may introduce complexity and interoperability challenges. If each central bank runs its own jurisdictional ledger, coordination becomes essential. The BIS report acknowledges that standardization of protocols and data formats will be necessary for seamless operation.
Market participants are watching closely. The ability to settle cross-border payments in seconds could unlock trillions of dollars in trapped liquidity in trade finance and supply chain operations. It could also reduce the cost of remittances and international business transactions, benefiting consumers and corporations alike.
The projected growth of cross-border payments to $320 trillion by 2032 underscores the urgency of modernization. Current infrastructure, built in the 20th century, is ill-equipped to handle the volume and complexity of modern global commerce. Project Agorá offers a glimpse of a future where payments are as fast and frictionless as sending a message.
As the project moves into real-value testing, the BIS and participating central banks will gather invaluable data on performance, user experience, and regulatory implications. The lessons learned will inform the design of future payment systems, not only for wholesale but potentially for retail use as well. Whether Project Agorá becomes the standard or inspires other architectures, it has already succeeded in demonstrating that tokenized payments can settle in seconds, transforming what was once a theoretical concept into a practical reality.
Source: Cointelegraph News