BIS Begins Real-Money Tests of Tokenized Cross-Border Payments

The Bank for International Settlements has started real-money testing of Project Agorá, a blockchain-based system designed to pilot tokenized cross-border payments. The trial brings together central banks and private institutions to evaluate whether a shared ledger of tokenized central bank reserves and commercial bank deposits can speed up and lower the cost of international transfers.

Seven central banks and more than 40 regulated institutions developed the project over two years. Participants in the trial include the Federal Reserve Bank of New York, the European Central Bank, the Bank of Japan, the Bank of Canada and the Bank of England, alongside JPMorgan, UBS Group, Deutsche Bank, Mastercard and Visa. The BIS says the tests will use actual funds to validate settlement and operational behavior.

At the centre of the prototype is a unified ledger that puts tokenized central bank reserves and tokenized commercial bank deposits on a single platform. Required transaction details are confirmed before settlement, and all participant balances update at the moment the payment is executed. Andrea Maechler, deputy general manager of the BIS, described the mechanism: “Once you know you have everything to run the transaction, you settle it in one go.”

The BIS is testing distributed-ledger technology while keeping correspondent banking as the main channel for international transfers. Correspondent banks continue to host compliance tools used to enforce sanctions and screen for illicit finance. Project Agorá aims to layer tokenized settlement on top of existing rails so current sanctions and anti-money-laundering checks remain in place.

Organizers say the prototype to date has shown tokenization can address delays and reduce intermediaries in wholesale cross-border payments without removing existing safeguards. Tim Adams, head of the Institute of International Finance, described the trial as beneficial for the wider financial system and noted participants are prioritizing correctness over speed to market.

The BIS and its partners have not set a timetable for full deployment. The real-money tests will focus on operational issues, interoperability across jurisdictions and how compliance processes function when settlement is tokenized. Results from the trial will inform how central banks, global banks and payment networks design future settlement arrangements.