Revolutionizing International Finance
Project Agora is a significant initiative launched by the Bank for International Settlements (BIS) in collaboration with central banks from seven countries: the Federal Reserve Bank of New York (U.S.), the Bank of France (Eurosystem), the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, and the Bank of England. The goal of the project is to explore how tokenization—converting assets into digital tokens—can be used to enhance cross-border payments and improve the overall functioning of the global monetary system.
The project focuses on tokenizing both wholesale central bank money and commercial bank deposits, using smart contracts and programmable platforms to make financial transactions faster, more transparent, and cost-efficient. These smart contracts enable new settlement options and transactional capabilities that are currently impractical, all while maintaining the traditional two-tier monetary system where central banks and commercial banks play their established roles.
A key part of Project Agora is the creation of a "unified ledger" that bridges different financial systems, aiming to solve challenges like legal, regulatory, and technical inconsistencies across jurisdictions. One of the driving forces behind the project is to lower the high costs and inefficiencies typically associated with cross-border payments, especially in terms of compliance with anti-money laundering (AML) and know-your-customer (KYC) requirements, which are currently repeated by multiple intermediaries.
The BIS Innovation Hub leads the initiative, emphasizing a centralized, controlled model rather than decentralized blockchain technology for this financial infrastructure. The project is positioned as a public-private partnership, and private sector financial institutions are invited to participate via the Institute of International Finance (IIF)(Ledger Insights)(IIF)(Cointelegraph).
Project Agora is distinct from other digital currency initiatives such as mBridge (involving China, Hong Kong, Thailand, and others), which focuses more on decentralized approaches. By involving major global currencies such as the USD, Euro, GBP, and Yen, Agora is seen as a more integrated and comprehensive effort in the global CBDC landscape(Treasury Today |).
