Today the BIS unveiled the application process for private sector institutions to participate in Project Agorá. That’s the tokenization initiative for wholesale cross border payments involving seven central banks. Eligible applicants are financial institutions, including FMIs with accounts at the participating central banks, plus critical payment service providers. It’s a tight timeframe to make a decision, with applications closing on May 31 and the results announced in early August.
While Agorá is a public private partnership, it is the private sector that will fund the work through participation fees. A likely rationale is that the private sector founded Swift.
The initiative is the first to explore the BIS concept of a Unified Ledger seriously. It is coordinated by the BIS and the Institute of International Finance (IIF), although participants need not be IIF members. The seven central banks include Europe (France), Japan, Korea, Mexico, Switzerland, England and the U.S. represented by the New York Innovation Center (NYIC). In the case of the EU, the applicant needs an account with any Eurosystem central bank.
Agorá will explore the use of tokenized deposits and tokenized central bank money for cross border payments using smart contracts. Four workstreams include business requirements, technology, legal and communications.
Applicants will be assessed based on their footprint in global payments and domestically, expertise in innovation projects, and the experience of the executives who will represent the institution. However, there is a desire to ensure a diverse group of participants.
Agorá isn’t just a PoC
The application form emphasizes that Agorá is not purely a proof of concept (PoC), with the intent to progress it beyond that stage. However, it’s also described as an experimental research project.
Several of the relevant institutions are already participating in initiatives that cross over with Agorá. For example, there’s a Regulated Liability Network project in the UK, a Regulated Settlement Network initiative in the United States and the EU started its wholesale DLT settlement trials this week. Nonetheless, given the involvement of seven central banks, there’s likely to be plenty of candidates.
