Several central banks across the world and over 40 commercial banks have furthered their testing of a closely monitored digital payment project.
Known as the Agora project, the initiative is led by the Bank of International Settlements and includes the New York Fed and a group of banks from Europe, Korea, Mexico, and Japan, whose currencies account for the majority of global payments.
Currently, cross-border payments go through a global web of correspondent commercial banks. However, this can pose difficulties regarding the processing time, which can be inefficient, and cost, which can be high, when multiple links are in the chain, or they include less frequently traded currencies from developing countries.
A key milestone in optimising cross-border transactions
According to BIS Deputy General Manager Andréa Maechler, beginning user testing of the Agora platform comes as a major advancement for the project, which, recently, has been receiving more attention.
The testing phase is projected to last approximately six months. Following this, the progress will be reported to decision makers, who will provide feedback on what else needs to be achieved for a formal rollout to be possible.
Additionally, a probable next move would be the inclusion of other central banks and currencies in the project. These could be those already on the Continuous Linked Settlement (CLS) system, such as the Canadian, Australian, and New Zealand dollars and the main Scandinavian currencies.
Authorities across the world have been looking to scale the efficiency and cost-effectiveness of cross-border payments for a while now. The Financial Stability Board, with a mandate from the G20, has positioned this as one of its main priorities for 2026, with previous targets set to be missed.
Furthermore, Tim Adams, the head of the Washington-based Institute of International Finance, which is coordinating the input of the commercial banks, mentioned it was moving the work from the theory stage to how it might be applied to the real world. He said that tokenisation has the potential to improve how value moves; however, this can be achieved only if it can be effectively integrated with governance, compliance, and risk frameworks that regulators and markets can have trust in.
Even if US President Donald Trump has criticised the idea of a digital version of the dollar, project Agora centres on the payments between banks in the wholesale market, not those conducted by consumers in shops or online.
