A group of the world’s leading central banks and over 40 major commercial banks are to step up testing of one of world’s most closely watched digital payments projects, as the race to upgrade – and dominate – the international financial architecture heats up.
The Agora project, as it is known, is spearheaded by the Bank for International Settlements and involves the New York Fed as well as leading central banks from Europe, Korea, Mexico and Japan whose currencies account for the bulk of global payments.
Cross-border transactions currently flow via a global web of correspondent commercial banks, but can be both slow and costly when multiple links are in the chain or they involve less frequently traded currencies from developing countries.
BIS Deputy General Manager, Andréa Maechler described the decision to start user testing of the Agora platform as “a major milestone” for the project which has been garnering increasing attention recently.
Global authorities have long sought to make international payments faster and cheaper and the Financial Stability Board, with a mandate from the G20, has made it one of its key priorities this year with previous targets set to be missed.
Although not a direct rival, Agora is also often compared to another cross-border payments project called mBridge. The BIS also used to oversee mBridge but unexpectedly pulled out in late 2024, effectively leaving China in control.
“Tokenisation 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 instantly and simultaneously approve payments.
Tim Adams, the head of the Washington-based Institute of International Finance which is co-ordinating the input of the commercial banks, explained it was moving the work from the theory stage to how it might work in the real-world.
“Tokenisation 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.
While U.S. President Donald Trump has slammed the idea of a digital version of the dollar, Agora focuses on the payments between banks in the so-called ‘wholesale’ market rather than those made by consumers in shops, cafes or online.
The new testing phase is expected to last around six months, after which the progress will be reported to decision makers who will then outline what else needs to be done for a formal launch to be possible, if deemed desirable.
One of the likely next steps could see a number of other central banks and currencies added to the project, most likely those already on the Continuous Linked Settlement (CLS) system such as the Canadian, Australian and New Zealand dollars and the main Scandinavian currencies.
Global financial messaging network SWIFT, which is also working on its own blockchain-based overhaul, is also part of the current group of financial firms involved in project.
