Project Agora Shows How Tokenisation Can Improve Wholesale Cross-Border Payments

Summary

Project Agora, a public-private collaboration convened by the Bank for International Settlements and the Institute of International Finance involving seven central banks and more than 40 private financial institutions, published findings demonstrating that atomic settlement of wholesale cross-border payments using tokenised central bank reserves and tokenised commercial bank deposits is achievable securely and with finality across currencies and jurisdictions, with the project now advancing to real-value transaction testing and adding the Bank of Canada as a new participant.

Market Impact

The project's layered prototype architecture allows central banks to retain full autonomy over national currencies and operations while still participating in an interoperable shared platform—a design choice addressing sovereignty concerns that have historically slowed multilateral payment infrastructure initiatives. Legal analysis confirmed settlement finality is achievable across all seven participating jurisdictions (covering the Bank of England, Federal Reserve Bank of New York, Bank of France representing the Eurosystem, Bank of Japan, Bank of Korea, Bank of Mexico, and Swiss National Bank), though the report noted further work is needed to align technical, operational, and contractual requirements with each jurisdiction's specific legal framework. Critically, the report emphasized that tokenisation under Project Agora does not alter the legal characterization of, or obligations rel

Why It Matters

Project Agora's demonstration that seven major central banks can achieve legally sound atomic settlement of tokenised reserves across currencies, without altering the underlying legal status of those reserves, removes a key technical and legal uncertainty that has constrained central bank interest in cross-border payment tokenization.

Key Points

• Project Agora, involving seven central banks (BoE, NY Fed, Bank of France, Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank) and 40-plus private institutions, demonstrated atomic settlement of tokenised wholesale cross-border payments is achievable securely across jurisdictions
• The project will advance to real-value transaction testing, with the Bank of Canada joining as a new participant
• Legal analysis confirmed settlement finality is achievable across all seven participating jurisdictions, though further work is needed to align technical and contractual requirements with local legal frameworks
• Tokenisation under Project Agora does not alter the legal characterization of central bank reserves or commercial bank deposits, preserving existing regulatory treatment of the underlying assets

Key Entities

Evidence

The project has shown the possibility of completing atomic settlement of wholesale cross-border transactions using tokenised central bank reserves and tokenised commercial bank deposits. The findings indicate this is...

Supports: Confirms the core atomic settlement finding

The project intends to advance testing, including conducting real-value transactions involving certain currencies and participants. The Bank of Canada will also participate in the project.

Supports: Documents the next phase of testing and the new participant

Legal analysis finds that settlement finality is achievable across all seven participating jurisdictions. Further work is needed to define technical, operational and contractual requirements best aligned with the lega...

Supports: Grounds the legal finding and its remaining open questions

Tokenisation, as contemplated in Project Agora, does not alter the legal characterisation of, or associated obligations relating to, central bank reserves and commercial bank deposits.

Supports: Grounds the preservation of existing legal treatment of underlying assets