The Bank for International Settlements (BIS) confirmed Thursday that Project Agorá, its ambitious initiative to reimagine wholesale cross-border payments, has completed a real-value settlement exercise involving 28 financial institutions and central banks. The project settled 800,000 Swiss francs (about $1 million) across 17 distinct transaction scenarios, marking a significant step toward production readiness.
The tests were designed to prove that tokenized central bank reserves and tokenized commercial bank deposits can be used side by side to settle cross-border transactions in a way that is faster, cheaper and more transparent than traditional correspondent banking. The settlement trials involved six currencies: Swiss francs, euros, pounds sterling, Japanese yen, South Korean won and US dollars. According to the BIS, the average settlement time clocked in at about 80 seconds, a dramatic improvement over conventional bank-to-bank transfers that can take one to two business days or even longer.
Who took part in the trials?
On the central bank side, the participants included the Bank of England, Bank of France, Bank of Japan, Bank of Korea and the Swiss National Bank. Commercial banks participating in the trials included JPMorgan Chase, Citi, Deutsche Bank, BNP Paribas, UBS, Standard Chartered and MUFG, alongside other unnamed institutions. The mix of global systemically important banks and national central banks is itself a signal that the project is not just an academic exercise but a serious effort to redesign the plumbing of international finance.
Project Agorá was launched by the BIS in 2024 with the goal of exploring how tokenization could make wholesale payments more efficient. The name 'Agorá' draws from an ancient Greek assembly place, reflecting the idea of a shared space in which central banks and commercial banks can interact with a common infrastructure. The project builds on earlier BIS work on tokenized assets and unified ledgers, including the concept of embedding both central bank money and commercial bank money on a common programmable platform.
The value of tokenized settlement
Tokenization refers to representing claims on a blockchain or other distributed ledger. In the context of Project Agorá, central banks issue tokenized reserves — a digital form of settlement assets for financial institutions — while commercial banks issue tokenized deposits that represent claims on their own balance sheets. By putting these instruments on a shared ledger, the settlement process can be automated and compressed.
The BIS has been advocating for a unified ledger concept, in which tokenized central bank money, tokenized commercial bank money, and potentially other tokenized assets can all reside on a single programmable platform. This structure allows what the BIS calls atomic settlement — transactions are finalized simultaneously or not at all, eliminating the risk that one leg of a transaction fails after the other is executed. This removes a major source of counterparty and operational risk in cross-border payments, particularly in cases where different jurisdictions and currencies are involved.
In May 2026, Project Agorá reported that its prototype had demonstrated atomic settlement across multiple currencies and jurisdictions. The July trials went further by using real value rather than test money. Even though the total amount settled appears modest at roughly $1 million, the purposeful choice to use real tokens in a live environment under the supervision of central banks is an unmistakable signal of progress.
The settlement time of about 80 seconds also raises the bar for what is possible. Traditional correspondent banking typically involves a chain of banks passing payments across time zones, each with its own cutoffs, liquidity requirements and reconciliation processes. A transaction that spans multiple currencies can take several days, and costs can be high, especially for small-value wholesale transfers. Tokenized settlement aggregates many of these steps into a single, rapid process.
Why cross-border payments are so difficult
The challenge of cross-border payments has long been a sore point in the financial system. Unlike domestic payments, which in many countries are now instant and free, cross-border transfers remain slow, expensive and opaque. One reason is that international payments rely on a correspondent banking network where banks hold accounts with each other across borders. Each relationship requires separate legal agreements, credit lines and liquidity buffers. When a payment travels through several banks, the cost and time compound. Moreover, the system is not open to all: many smaller institutions and developing countries have limited access to correspondent banking, which has implications for trade, remittances and financial inclusion.
Central banks and international bodies have called for improvements. The Committee on Payments and Market Infrastructures, which sets global standards for payment systems, has urged faster and cheaper cross-border payments. Tokenization has emerged as one of the most promising technological avenues. By using a shared ledger, much of the friction in the correspondent banking chain can be removed. The ledger itself can enforce rules, handle conversion, and ensure that settlement happens in real time across all participating central banks.
The broader BIS tokenization agenda
Project Agorá is far from the only initiative the BIS is pursuing in the tokenization space. The BIS Innovation Hub has launched a number of projects aimed at exploring novel technologies for central banking and financial infrastructure. These include projects focused on central bank digital currencies (CBDCs) for both retail and wholesale use, as well as experiments in tokenized securities and regulatory technology. Agorá is distinctive in its focus on interoperability between central bank money and commercial bank money, and in its emphasis on direct participation from a broad range of both private and public sector institutions.
The choice of the six participating currencies reflects the global nature of the initiative. The Swiss franc was used as the settlement currency for the trial, but the inclusion of the euro, pound sterling, yen, Korean won and US dollar shows that the architecture is designed to handle a multi-currency environment. The presence of the Bank of Korea is notable, as Asian economies are actively exploring tokenization and CBDC implementations. Similarly, the involvement of the UK, France and Switzerland indicates that European central banks are taking the lead in collaboration with the BIS.
Implications for the banking system
The successful trial has potentially significant implications for commercial banks. For one, tokenized deposits could fundamentally change how banks manage liquidity and intraday credit. In a unified ledger, a bank's obligation to another bank could be settled instantly with tokenized reserves instead of a drawn-out clearing process. That could release billions of dollars in trapped liquidity that is currently allocated to prefunding and risk buffers for cross-border transactions.
It could also open up new ways to program money. With tokenized deposits, a bank could program conditions into the payment, such as release of funds only when a shipment of goods is delivered or when regulatory compliance is complete. Smart contracts could automate complex payment-versus-payment processes, nesting cash transactions with securities trades and other financial operations. This programmability could reduce the need for manual reconciliation and legal oversight, lowering costs for both banks and their clients.
At the same time, the implications for smaller banks and non-bank financial institutions are significant. If tokenized wholesale payments become mainstream, access to the global payment system might become easier, because the fixed costs of a unified ledger may be lower than maintaining a global network of correspondent accounts. This could broaden participation and reduce the current trend of 'de-risking,' where global banks cut off smaller institutions in developing countries due to compliance burdens.
Challenges remain
While the trial results are promising, significant challenges remain before a system like Agorá can be deployed at scale. Legal and regulatory questions must be resolved, including the classification of tokenized central bank reserves and tokenized deposits under existing financial laws. Each jurisdiction has its own insolvency regime, property rights framework and anti-money laundering rules. Cross-border settlement requires a coherent legal foundation that spans multiple jurisdictions, which is difficult to achieve.
There are also technical hurdles. The infrastructure must be robust enough to handle the real-time, 24/7 settlement flows of the global financial system, with extremely high security and resilience. The BIS and its partners have been cautious, emphasizing that the July trials are part of a longer process. The BIS said that testing will continue as Project Agorá progresses, and no specific timeline has been announced for a live, production-ready system.
During the trial, the average settlement time of 80 seconds is not necessarily the ceiling. As the technology matures, settlement times could potentially drop to nearly instant. However, it is also important to avoid overpromising. Real-world deployment will face the messy complexity of legal agreements, network interoperability, and changing market practices. The success of the trial does not guarantee immediate adoption, but it provides a strong foundation for further experimentation.
The BIS has become a vocal advocate for tokenization, arguing that without innovation, the current payment system will become increasingly obsolete. In a world where digital platforms, cryptocurrencies and fintechs are reshaping finance, central banks and traditional financial institutions cannot afford to be complacent. Project Agorá is a key example of how central banks are embracing new technology while preserving the safety and soundness of the financial system.
The fact that the BIS was able to bring together 28 institutions, settle real value across six currencies, and complete 17 transaction scenarios is a testament to the level of cooperation that is possible in this space. It demonstrates that the private sector and public sector can work together to build the next generation of financial infrastructure. While many questions remain, the results of Project Agorá's July trials will inform the next phase of this important effort.
Source:Cointelegraph News