Tokenization Could Solve a Major Problem for Banks According to the BIS

The BIS’s Agorá project has reached a decisive stage. After months of simulations, its members are moving to real value transactions to test the tokenization of central bank reserves and commercial bank deposits. Seven central banks and over 40 private financial institutions are participating in the initiative.

Tokenization Could Solve a Major Problem for Banks According to the BIS

Jointly led by the BIS, seven central banks and over 40 private financial institutions, the Agorá project has pinpointed an age-old problem in the global banking system: cross-border payments that half-fail.

The central concept is atomic settlement. A transaction is conducted in an “all or nothing” mode: no longer can one leg of the payment succeed while the other remains stuck. 

This type of incident, common in the current SWIFT architecture, leads notably to delays of several days and significant reconciliation costs for the banks involved.

Leading players are also participating in the experiment: the Federal Reserve Bank of New York, the Bank of England, the Bank of Japan, and the Swiss National Bank. This week, the Bank of Canada joined them.

From Simulation to Real Tests, While Wall Street Accelerates

The schedule is speeding up. Members of the Agorá project now plan transactions involving real currencies and institutions, no longer just controlled environments. A notable milestone for an initiative that was until now just on paper.

This shift occurs amid a race to tokenization. The DTCC, Wall Street’s clearinghouse, is preparing a tokenized infrastructure for stocks, ETFs, and U.S. Treasury bonds. Nasdaq and ICE, owner of the NYSE, are each developing their own blockchain-based systems.

On the regulatory side, caution remains. At the end of May, the SEC postponed its exemption project on tokenized stocks, notably to prevent platforms from issuing digital versions of stocks without the consent of the companies concerned. This signals that infrastructure is advancing faster than law.

The BIS also maintains an explicit reservation about private stablecoins. The agency considers they carry systemic risks and calls for accelerated regulation of the sector.

In short, the Agorá project marks a concrete turning point in the plumbing of global finance. Atomic settlement, reduction of intermediaries, Bank of Canada in the loop: the conditions for a revamp of the cross-border payment system are being put in place. Institutional tokenization is no longer a pilot project. It is entering the phase of real transactions, with real currencies and real responsibilities.