In recent years, global financial markets have been actively exploring how blockchain and tokenization technologies can enhance cross-border payment efficiency. While international payment systems have evolved over decades with robust banking settlement and regulatory frameworks, the growing frequency of global capital flows has exposed significant challenges for traditional payment infrastructures in terms of speed, cost, transparency, and cross-border collaboration. According to research from the Bank for International Settlements (BIS), cross-border wholesale payments today often require multiple banks, intermediary clearinghouses, and compliance checks across different jurisdictions—meaning a single transaction may take hours or even days to achieve final settlement. This model increases operational costs and heightens both liquidity management and settlement risk.
To address these challenges, BIS and several central banks are jointly advancing Project Agorá, which aims to build a next-generation cross-border wholesale payment architecture leveraging tokenization, a Unified Ledger, and Atomic Settlement technology. Unlike many blockchain projects focused on retail payments or cryptocurrency trading, Project Agorá is designed to optimize large-value cross-border payment flows between banks and financial institutions, while preserving the existing two-tier banking system and exploring more efficient settlement models.
Why does cross-border payments need a new operational framework?
Cross-border payments are a foundational element of the global financial system, but current architectures are largely based on legacy financial systems built decades ago. Despite their maturity and stability, these systems are showing their limits as globalization and digital finance accelerate.
First, payment systems in different countries are typically managed by their own banks and clearinghouses, so a single cross-border transaction often passes through multiple correspondent banks to reach its destination. Each additional intermediary can extend settlement times, drive up operational costs, and add complexity to information flows. Second, banks across countries have differing business hours, regulatory requirements, and payment infrastructures. Even after the remitting bank debits the funds, the receiving bank may delay crediting due to time zone differences, holidays, or clearing schedules, which impacts the efficiency of fund movement. Cross-border payments also involve anti-money laundering (AML), sanctions screening, know your customer (KYC), and other regulatory checks. Today, these reviews are typically performed sequentially by multiple institutions, and as transaction volumes grow, this can lead to longer wait times and redundant checks.
Project Agorá is not about simply migrating existing payment systems to blockchain; it is a wholesale redesign of cross-border payment processes, aiming to reduce friction and cost through new technical architectures, while maintaining financial stability and regulatory compliance.
Core Concept of Project Agorá: Tokenized Payments
(Source: Project Agorá)
The core principle of Project Agorá is tokenized finance. Here, tokenization does not mean issuing new cryptocurrencies, but rather representing traditional financial system assets as digital tokens that can circulate and settle on blockchain or a Unified Ledger. Project Agorá focuses on two key asset types: central bank reserves and commercial bank deposits. These assets still represent funds within the existing financial system, but are transacted on new infrastructure via tokenization. This enables payment processes to be completed on a unified platform, eliminating the need for multiple intermediary systems. Transaction data, fund status, and settlement processes can be updated in real-time, increasing transparency and overall efficiency. BIS has repeatedly emphasized that Project Agorá does not intend to create a new monetary system, but to upgrade existing financial infrastructure using tokenization technology. In essence, Project Agorá is an upgrade to the current financial system, not a wholesale replacement of traditional banking architecture.
How does the two-layer ledger architecture work?
Project Agorá implements a two-layer architecture, rather than concentrating all funds on a single ledger. Central bank reserves remain on ledgers controlled by central banks in each country and exist in tokenized form, while commercial bank deposits are deployed on a Unified Ledger jointly used by participating financial institutions.
This approach achieves two main objectives: First, it preserves the two-tier banking system—central banks continue to provide base money and financial stability, while commercial banks deliver payments, lending, and other financial services, avoiding disruptive changes to the financial system’s core structure. Second, it improves cross-border payment efficiency. The Unified Ledger allows financial institutions from different countries to exchange payment information and settle using tokenized reserves on a single platform, eliminating the need for multiple correspondent banks to relay payment instructions. This structure also allows each jurisdiction to retain its own financial management authority, while creating a more efficient cross-border payment collaboration mechanism.
Why is the Unified Ledger central to Project Agorá?
In Project Agorá’s design, the Unified Ledger is the backbone of the payment architecture. Traditionally, cross-border payments involve multiple, siloed financial systems—each bank maintains its own ledger, and payment information must be repeatedly transmitted and reconciled, leading to delays and duplication. The Unified Ledger creates a shared ledger accessible to authorized financial institutions. Both parties to a transaction can verify, update, and settle transactions within the same infrastructure, without waiting for separate systems to synchronize. Importantly, the Unified Ledger does not mean all data is public: Project Agorá uses permission controls, data isolation, and regulatory mechanisms to ensure participants only access information relevant to their transactions. This structure balances efficiency with privacy and financial security, aiming to build a next-generation cross-border payment network that is transparent, traceable, and highly efficient.
Why is Atomic Settlement a core feature of Project Agorá?
Atomic Settlement is one of Project Agorá’s most critical technologies and the key to improving efficiency and reducing risk in the payment process. In traditional cross-border payments, payments and receipts are rarely completed simultaneously—the remitting bank may debit funds, but the receiving bank often waits for confirmation from intermediaries, clearing updates, or the next business day before crediting accounts. Any delay or failure in this chain can result in funds being trapped mid-process, increasing uncertainty.
Atomic Settlement takes a fundamentally different approach. “Atomic” means the transaction is indivisible: all fund movements in a payment must be completed simultaneously, or the entire transaction is canceled and account balances remain unchanged. This “all-or-nothing” mechanism eliminates partially completed transactions and significantly reduces settlement risk.
For example, if a Japanese bank sends a wholesale payment to a European bank, Project Agorá first verifies both parties’ funds, liquidity, and compliance, then executes payment and receipt simultaneously. The process requires no manual confirmation or stepwise handling by multiple intermediaries, dramatically improving payment efficiency. From the BIS perspective, Atomic Settlement is not just about speed—it’s about establishing greater transaction certainty, enabling financial institutions to manage liquidity more efficiently and reduce credit risk.
How does a cross-border payment complete in Project Agorá?
Project Agorá’s payment process, though built on tokenization, follows the logic of cross-border payments familiar to financial institutions, now integrated through a Unified Ledger. The remitting bank submits a payment instruction, including amount, counterparty, currency, and payment conditions. The system first checks for sufficient tokenized reserves and liquidity. Next, the platform runs compliance checks—AML, KYC, sanctions screening, and other regulatory requirements—in parallel. Unlike traditional cross-border payments, where checks are performed sequentially by different institutions, Project Agorá’s unified platform executes these steps simultaneously, reducing wait times.
Once all conditions are met, the Unified Ledger initiates Atomic Settlement, updating payer and payee balances and adjusting central bank reserves and commercial bank deposits in real time. All participating financial institutions can immediately access the latest transaction status: the payer confirms payment, and the payee sees instant settlement—no need to wait for multiple intermediary notifications. The core innovation is integrating processes that once spanned different systems, institutions, and time zones into a single shared infrastructure.
How does Project Agorá integrate AML, KYC, and compliance?
Regulatory compliance is a major challenge for cross-border payments. Every international payment must meet the laws of all involved countries—AML, sanctions lists, counter-terrorism financing, and KYC. If these procedures are inefficient, even the fastest payment system cannot truly improve the cross-border payment experience.
Project Agorá addresses this by embedding compliance into the payment architecture. Traditionally, different banks may each perform the same checks, leading to redundant verifications and information lags. In Project Agorá, the platform standardizes and synchronizes compliance, reducing duplication and wait times. The platform also boosts transaction transparency: participating institutions can track payment progress in real time, eliminating the need for email or phone confirmations. This design improves operational efficiency and reduces the risk of manual errors.
Why does Project Agorá emphasize the singleness of money?
BIS often highlights the concept of “singleness of money” in the context of tokenized finance. This means that money in the market should have consistent value and be fully interchangeable, regardless of payment method, bank, or platform.
Project Agorá stresses this principle because its goal is not to create new private money, but to use blockchain technology to improve the circulation of existing fiat currencies. In this framework, tokenized central bank reserves still represent central bank money, and commercial bank deposits still represent existing bank deposits—they simply exist in a new technical form, not as new monetary value. By maintaining the two-tier banking system and the central bank’s core role, Project Agorá aims to drive financial innovation while preserving trust in fiat currency and systemic stability.
How does Project Agorá differ from traditional cross-border payments?
Project Agorá is not a simple migration of bank payments to blockchain, but a complete redesign of cross-border payment infrastructure. Traditional cross-border payments involve multiple correspondent banks, each with its own ledger and settlement process, so transaction speed is often limited by disparate systems and business hours.
Project Agorá leverages the Unified Ledger to create a shared payment environment, allowing both parties to exchange information and settle funds on the same platform, greatly reducing intermediary steps. Atomic Settlement lowers settlement risk from asynchronous payments, while synchronized compliance checks improve administrative efficiency. Crucially, Project Agorá does not replace the existing financial system; it preserves the roles of central banks, commercial banks, and regulators, using tokenization to enhance payment efficiency. It’s best seen as an upgrade to current cross-border payments, not a full replacement of the financial system.
What challenges does Project Agorá still face?
While Project Agorá demonstrates the potential of tokenized payments, it is still in the research and testing phase, with several hurdles to overcome before full-scale adoption. First, differences in legal systems and regulatory frameworks across countries require ongoing coordination among central banks and regulators to establish unified cross-border governance standards. Second, financial infrastructure must be exceptionally robust—network security, system resilience, data governance, and operational management must all meet the highest standards to support global wholesale payments. As more institutions join the Unified Ledger, managing liquidity, increasing transaction throughput, and balancing efficiency with privacy will be key areas for further development. BIS has stated that Project Agorá will continue real-value testing to verify the feasibility and stability of tokenized payments in real-world financial markets.
Summary
Project Agorá is not a blockchain experiment, but a major initiative led by the Bank for International Settlements in collaboration with central banks and financial institutions to explore next-generation cross-border payment infrastructure. Through innovations like tokenized finance, the Unified Ledger, and Atomic Settlement, Project Agorá seeks to reintegrate payment, settlement, and compliance, addressing long-standing inefficiencies and costs in traditional cross-border payments. Most importantly, Project Agorá does not seek to disrupt the existing financial system, but introduces blockchain technology on top of the central bank, commercial bank, and two-tier banking model to create a more efficient and transparent payment framework. As global cross-border payment demand grows and tokenized finance becomes a research focus for central banks, Project Agorá’s model could help shape the future of international financial infrastructure.
FAQ
Q1: What are the core technologies of Project Agorá?
Project Agorá is built on tokenization, the Unified Ledger, and Atomic Settlement, aiming to improve cross-border payment efficiency and reduce settlement risk through these technologies.
Q2: What is Atomic Settlement?
Atomic Settlement is an “all-or-nothing” transaction mechanism—only when all transaction conditions are met will both payment and receipt be completed, avoiding settlement risk from partially completed transactions.
Q3: How does Project Agorá improve traditional cross-border payments?
Project Agorá integrates payment processes via a Unified Ledger and executes compliance and settlement simultaneously, reducing intermediary banks, shortening transaction times, increasing transparency, and lowering the operational costs and risks of cross-border payments.
Q4: Will Project Agorá replace the existing banking system?
No. Project Agorá does not aim to replace the current banking system, but to enhance the efficiency and security of cross-border payment infrastructure using tokenization and blockchain technology, while preserving the two-tier structure of central and commercial banks.
