BIS to Create Platform for Payment and Wholesale CBDC Tokenization

In collaboration with seven central banks, the Bank for International Settlements (BIS) launched an initiative to explore the creation of a single platform for tokenizing commercial bank deposits and their interaction with wholesale central bank digital currencies (CBDC).

The Bank for International Settlements (BIS) announced the launch of Project Agorá, an initiative to explore the possibility of tokenizing wholesale CBDCs and commercial bank deposits and creating a programmable platform for their interaction.

Seven central banks will participate in the project:

1. Bank of France (BdF);
2. Bank of Japan (BoJ);
3. Bank of Korea (BoK);
4. Bank of Mexico (BdM);
5. Swiss National Bank (SNB);
6. Bank of England (BoE);
7. Federal Reserve Bank of New York (NY FED).

Project Agorá will test the feasibility of the following:

• tokenization of central bank money and commercial bank deposits on programmable platforms;
• increasing the speed and reliability of cross-border payments while reducing their cost;
• realizing transactions through tokenization and smart contracts, which is currently not possible;
• improving the functioning of the monetary system through public and private partnerships.

According to Cecilia Skingsley, Head of the BIS Innovation Hub, the project is experimental and aims to explore and deliver shared benefits to the global central banking community. The BIS will act as an intermediary in the initiative, giving private commercial banks access to the project. Several regulatory financial institutions are also planned to be involved in Project Agorá, which will monitor the project in the context of regulatory compliance across jurisdictions.

Hyun Song Shin, Economic Advisor and Head of Research at BIS, says the project’s primary goal is to improve the global financial system. In his opinion, tokenization combines all the necessary functions for this purpose, including taking into account the traditional database and managing the transfer of funds.

In 2024, BIS plans to launch at least six new projects to study tokenization, CBDCs, cybersecurity, and sustainable finance.

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