On May 27, the Bank for International Settlements and the Institute of International Finance published a report on “Project Agorá,” a public-private collaboration that, according to its participants, demonstrates how tokenization and programmable technologies can address “persistent inefficiencies” in wholesale cross-border payments, which the report notes remain slow, costly and opaque due to “sequential processing” across multiple intermediaries in the correspondent banking system. The project, involving seven central banks — including the Federal Reserve Bank of New York — and more than 40 private sector financial institutions, concluded that “atomic settlement” (i.e., the “joint execution of payment steps…in a single transaction”) of wholesale cross-border transactions using tokenized central bank reserves and tokenized commercial bank deposits is achievable securely and with finality across currencies and jurisdictions. According to the report, the prototype featured a two-layer architecture that enables central banks to retain autonomy over national currencies while operating on an interoperable shared platform, with privacy safeguards at both the balance and transaction levels.

The report states that tokenization as contemplated in the project does not alter the legal characterization of, or associated obligations relating to, central bank reserves and commercial bank deposits, and that settlement finality is achievable across all seven participating jurisdictions. The report identified areas for future exploration, including more coordinated AML/CFT and sanctions approaches, liquidity saving mechanisms, cybersecurity and operational resilience, and interoperability with existing payment infrastructures. Project participants expressed strong interest in advancing the prototype, with future work expected to include real-value transactions involving certain currencies and participants, an enhanced role for the private sector, and the addition of the Bank of Canada as a participant.