Global banks join Project Agora to reshape cross-border payments

Over 40 private banking institutions have joined Project Agora, an initiative by the Bank for International Settlements (BIS) to explore using smart contracts to improve cross-border payment systems. 

The project aims to design a framework that integrates public and private money with tokenised assets to enhance settlement processes. 

Project Agora includes participation from several public institutions, such as the Bank of France, Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank, Bank of England, and the Federal Reserve Bank of New York. 

These institutions, along with private financial partners, will collaborate to test a unified ledger system that combines public wholesale money and private tokenised deposits within a single network. 

Institutions participating in the project include JPMorgan Chase, Santander, BBVA, BNP Paribas, Deutsche Bank AG, HSBC, Lloyd’s, MUFG, Standard Chartered, Visa, Mastercard, and Swift. 

Their role will involve designing and implementing the system, aiming to improve the efficiency of cross-border payment flows. 

The next phase of Project Agora involves developing and testing a prototype. 

BIS emphasised that while the project is experimental, it could potentially lead to a new type of financial infrastructure focused on cross-border payments. 

"The lessons learned during the project may set out a path for a new type of financial market infrastructure tailored to cross-border payments based on new technology," the BIS explained. 

Announced in April, Project Agora highlights the potential of technologies like tokenisation and smart contracts for modernising financial systems. 

BIS Chief Agustin Carstens emphasised that the project’s main challenge is coordinating the necessary regulatory and legal frameworks to support this innovative approach. 

Project Agora is a step toward exploring these possibilities in the financial sector.