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The effort is being led by the Bank for International Settlements (BIS), Reuters reported Wednesday (Jan. 14), with involvement from the Federal Reserve Bank of New York and central banks from Europe, Korea, Mexico and Japan.
Announced in 2024, Project Agora — from the Greek word for “marketplace” — is a collaborative initiative to develop a multicurrency unified ledger merging tokenized commercial bank deposits with wholesale central bank money, on a programmable platform featuring smart contracts.
The aim is to make cross-border transactions faster and cheaper, with BIS Deputy General Manager Andréa Maechler describing the decision to begin user testing of the Agora platform as “a major milestone” for the project as it attracts greater attention.
“Tokenization is shaping the future of global finance,” Maechler said. “Atomic settlement could be a game changer for cross border payments in a digital era,” she added, referring to the ability of digital technology to approve payments instantly and simultaneously.
Tim Adams head of the Washington-based Institute of International Finance, which is coordinating the contributions of the commercial banks in the project, told Reuters it was moving the work from the theory stage to real-world applications
“Tokenization has the potential to reshape how value moves, but only if it can be effectively integrated with governance, compliance, and risk frameworks that regulators and markets can trust,” Adams said.
According to Reuters, the project is focusing on payments between banks in the wholesale market rather than those made by consumers for retail purchases.
The new testing stage is expected to last around six months. From there, decision makers will explore the steps needed for a formal launch. Among these steps could be the addition of other central banks and currencies to the project, the report added.
“The interplay between Project Agora’s outcomes and the potentially broader integration of stablecoins across the U.S. market could represent a potential inflection point in the evolution of digital money,” PYMNTS wrote last year.
“While stablecoins — especially fiat-backed tokens like USDC, USDT and others — have long been heralded as the future of seamless, global, programmable value transfer, Project Agora’s goal challenges their relevance, particularly in the institutional, cross-border and regulated financial sphere.”
