More than 40 financial companies will join central banking group Bank for International Settlements to explore how tokenization can improve large-scale cross-border payments in Project Agorá.
The group will explore whether central bank money can be widely combined with tokenized commercial bank deposits, the BIS announced.
More than 40 financial companies will join the Bank for International Settlements – often called the central bank for central banks – to explore how tokenization can be used in large-scale cross-border payments through its Project Agorá, the BIS said on Monday.
The financial companies were selected by the BIS following a public call for participation in May. Project Agorá is now starting the design phase of the project.
Tokenization is the digitalization of real-world assets. Several countries have been exploring how to best maximize this emerging technology.
The BIS launched Project Agorá in April, bringing together seven monetary authorities from Britain, Japan, South Korea, Mexico, Switzerland, the US and Europe.
It builds on the BIS’s unified ledger concept and “will explore how tokenized commercial bank deposits can be seamlessly integrated with tokenized wholesale central bank money into a public-private programmable core financial platform,” the BIS said on its website.
“This major public-private partnership will seek to overcome several structural inefficiencies in the way payments are made today, especially across borders,” the BIS said.
The cross-border payment challenges that the BIS aims to overcome include different legal, regulatory and technical requirements, as well as different opening hours.