Today the Institute of International Finance (IIF) released the names of 41 firms selected to participate in the public – private tests of Project Agorá. It’s an ambitious project initiated by the BIS to modernize correspondent banking using a unified ledger, tokenized deposits and wholesale CBDC from seven central banks.
One of the key impediments to smooth cross border payments is compliance. With Project Agorá, the aim is to perform screening at the start of the payment process and to share it across the banks, helping to reduce one of the major delays in cross border payments – every bank doing the same checks independently, sometimes with different results.
A key benefit of tokenization is there is no separation of the message and money movement, so the money either moves or it does not. This should avoid one of the great frustrations of end users – money in limbo.
In late May the BIS wrote a brief paper outlining its vision for modernizing correspondent banking. It highlighted how compliance expenses have resulted in bank withdrawals from some of the cross border payment corridors where they are most needed. Today the BIS added an FAQ about Project Agorá.
On the one hand, the FAQ says Project Agorá is more than a proof of concept and it hopes to deliver a prototype where the lessons learned could create the foundations for a future financial market infrastructure. On the other hand, today’s announcement emphasized that BIS Innovation Hub projects are experimental in nature.
Project Agorá participants
Thirty five of the selected institutions are banks representing the seven jurisdictions. The others are Visa, Mastercard and financial market infrastructures Swift, Eurex Clearing, Euroclear and the SIX Digital Exchange (SDX). The full list is at the bottom.
The IFF is the coordinator for the private sector, with EY providing project management office help, and White & Case responsible for contracts.
With the participants selected, the design phase will now commence. The initiative is expected to run through to the end of 2025 when a report will be released.
The seven central banks are from France (for Europe), Mexico, New York (NYIC), Switzerland, England, Japan, South Korea.
The participants are:
Amina Bank, Banco Santander, Banorte, Banque Cantonale Vaudoise, Basler Kantonalbank, BBVA, BNP Paribas, BNY, CaixaBank, Citi, Crédit Agricole CIB, Deutsche Bank AG, Eurex Clearing AG, Euroclear S.A./N.V., FNBO, Groupe BPCE, Hana Bank, HSBC, IBK, Intercam Banco, JPMorgan Chase Bank N.A., KB Kookmin Bank, Lloyds Banking Group, Mastercard, Mizuho Bank, Monex, MUFG Bank Ltd., NatWest Group, NongHyup Bank, PostFinance, SBI Shinsei Bank, Shinhan Bank, SIX Digital Exchange (SDX), Standard Chartered, Sumitomo Mitsui Banking Corporation, Swift, Sygnum Bank, TD Bank N.A., UBS, Visa, Woori Bank.
Ledger Insights Research has published a report on bank-issued stablecoins and tokenized deposits featuring more than 70 projects. Find out more here.
