The Bank for International Settlements (BIS) has concluded a two-year experimental project known as Project Agorá, releasing a report that demonstrates how tokenized central bank reserves and commercial bank deposits can settle cross-border wholesale payments in seconds. The prototype, developed in collaboration with seven central banks and more than 40 regulated financial institutions, represents one of the broadest efforts yet to modernize the global payments infrastructure using blockchain technology.

Key findings of the report

The report, published in late May 2026, shows that once liquidity is locked, settlement occurs in seconds. The system employs atomic settlement — a mechanism where all balance updates happen simultaneously or not at all — which reduces credit and settlement risk significantly. The project aims to address the long-standing inefficiencies in international transactions that continue to burden global trade and financial activity.

According to data from FXC Intelligence cited in the report, cross-border payments totaled $195 trillion in 2024 and are projected to reach $320 trillion by 2032. These figures highlight the growing need for faster, cheaper, and more secure payment systems.

Technical architecture

Project Agorá uses a two-layer blockchain architecture. The first layer consists of tokenized central bank reserves on jurisdictional ledgers. The second layer combines those reserves with tokenized commercial bank deposits on a shared unifying ledger. This design enables atomic settlement across different jurisdictions while preserving what the BIS calls the “two-tier banking system” and the “singleness of money” — fundamental principles for financial stability.

The platform also allows financial institutions to conduct anti-money laundering (AML), sanctions, and fraud screening in parallel rather than sequentially. This parallel processing approach could dramatically reduce the high false-positive rates that plague today's cross-border payment systems, according to the BIS.

Benefits over current systems

Traditional cross-border payments often take days to settle due to multiple intermediaries, different operating hours across jurisdictions, and sequential compliance checks. Project Agorá's platform operates around the clock, mitigating delays caused by misaligned operating hours. The prototype also enhances transparency: all parties to a transaction have access to real-time payment status, while maintaining privacy from non-participating entities.

The BIS noted that, in the future, such visibility could be extended to end users, including debtors and creditors. This level of transparency is a significant improvement over the current system where payment progress often remains opaque until settlement.

Participating institutions

Seven central banks participated in the project: the Banque de France representing the Eurosystem, the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, the Federal Reserve Bank of New York via its New York Innovation Center, and the Bank of England. The project was convened jointly by the BIS and the Institute of International Finance (IIF), bringing together public and private sector expertise.

The involvement of such a diverse group of central banks underscores the widespread interest in tokenization as a tool to improve payment systems. The Bank of England, for instance, has already proposed extending settlement hours for its RTGS and CHAPS systems as part of a broader push toward near-24/7 settlement. Deputy Governor Sarah Breeden has stated that shared ledgers and tokenization could make payments and settlement faster and cheaper, with fewer intermediaries and shorter settlement windows.

Next steps and challenges

While the prototype has proven successful in a controlled environment, Project Agorá is now advancing to real-value testing with actual transactions involving certain currencies and participants. However, the BIS did not provide a specific timeline for full implementation.

The report identified several areas requiring further development before deployment. These include liquidity saving mechanisms to ensure efficient use of reserves, cybersecurity posture to protect against threats, and governance frameworks covering settlement finality, data governance, and risk management. The BIS also emphasized the need to distinguish Project Agorá from stablecoin alternatives, as the tokenized central bank reserves preserve the integrity of central bank money.

Broader context

The project aligns with ongoing efforts by central banks worldwide to explore tokenization and digital currencies. The BIS has been at the forefront of such research, with multiple innovation projects exploring different aspects of central bank digital currencies (CBDCs) and tokenized assets. Project Agorá specifically focuses on wholesale payments — the high-value transactions between financial institutions — rather than retail payments involving the general public.

The results come at a time when the G20 has prioritized improving cross-border payments as part of its financial inclusion agenda. The current system's inefficiencies are well-documented: transactions often require multiple correspondent banks, incur high fees, and take days to settle. Project Agorá's atomic settlement approach could eliminate many of these pain points, potentially reducing costs and settlement times dramatically.

The BIS has also cautioned about the risks of dollar stablecoins, which could strain bank funding and complicate monetary policy implementation. By contrast, Project Agorá's design maintains the two-tier banking system where commercial banks and central banks retain distinct roles, ensuring stability and singleness of money.

Industry reactions

The report has drawn attention from the financial technology community. Experts note that while the prototype is promising, widespread adoption would require significant coordination among central banks, regulators, and private institutions. Legal frameworks across jurisdictions would need to be harmonized to accommodate atomic settlement and tokenized assets. The BIS has acknowledged these challenges and plans to work with stakeholders to address them.

Some observers have pointed out that the two-layer architecture could serve as a template for other tokenized payment systems. The ability to conduct AML checks in parallel rather than sequentially is seen as a major efficiency gain. In today's system, each intermediary in the payment chain performs its own checks, leading to duplication and delays. Project Agorá's approach allows all checks to happen simultaneously, reducing both time and false-positive rates.

The project also demonstrates that blockchain technology can be adapted for use by central banks without compromising regulatory oversight or financial stability. Unlike permissionless blockchains used for cryptocurrencies, Agorá's permissioned network ensures that only authorized financial institutions can participate, maintaining control and compliance.

As the financial industry continues to explore tokenization, Project Agorá stands as a proof of concept that tokenized central bank money and commercial bank deposits can coexist seamlessly, paving the way for a more efficient global payment system. The BIS will continue to refine the prototype and work toward practical implementation, though no firm timeline has been announced.

Source: Cointelegraph News