Bank of Canada joins BIS Project Agorá to test tokenised cross-border payments

The Bank of Canada has joined Project Agorá, the Bank for International Settlements initiative exploring whether tokenisation can improve wholesale cross-border payments, the central bank announced. It joins seven other central banks already participating: the Federal Reserve Bank of New York, the Bank of England, the Bank of France representing the Eurosystem, the Bank of Japan, the Bank of Mexico, the Swiss National Bank and the Bank of Korea.

The project has tested the feasibility of a multi-currency unified ledger that enables atomic settlement of cross-border wholesale transactions, according to the announcement. The Agorá prototype combines tokenised commercial bank deposits with wholesale central bank money on a programmable platform, aimed at improving the speed, efficiency, transparency and accessibility of international payments.

Work will continue on testing the prototype and on examining how an Agorá-type platform could operate within existing legal and regulatory frameworks. That includes rules on settlement finality and laws designed to counter money-laundering and terrorism financing.

Senior Deputy Governor Carolyn Rogers said the Canadian economy could benefit from innovation in cross-border payments. She said tokenisation had the potential to make these payments faster, cheaper and more efficient and secure, and that Project Agorá was a unique opportunity to test the technology across several jurisdictions and currencies, with the participation of private sector financial institutions.

The Bank of Canada said its participation aligns with its research focus on the evolution of payments and how emerging technologies can support a more efficient financial system. More than 40 financial institutions are involved in the project, including systemically important banks, payment service providers and clearing houses.