BIS Project Finds Tokenization Could Improve Cross-Border Payments

A major experiment led by the Bank for International Settlements (BIS) has found that tokenization could make cross-border payments faster, safer and more efficient. The initiative, known as Project Agorá, explored how tokenized central bank reserves and commercial bank deposits could improve international money transfers by reducing delays and operational risks.

The project involved seven central banks and more than 40 private financial institutions. Participants included the Federal Reserve Bank of New York, the Bank of England, the Bank of Japan and the Swiss National Bank, alongside leading global banking firms.

Project Agorá Moves Toward Real-Value Testing

Project Agorá concluded that blockchain-based payment systems may support what is known as atomic settlement, where transactions are completed on an “all-or-nothing” basis. This approach helps reduce payment failures by ensuring both sides of a transaction settle at the same time.

Following successful simulations, participating institutions now plan to begin testing real-value transactions involving selected currencies and financial organizations. The Bank of Canada also joined the initiative this week, expanding international involvement.

Tokenization Gains Momentum Across Financial Markets

The findings come as global financial firms increase efforts to modernize payment and settlement systems through tokenization. Traditional cross border transfers often rely on multiple intermediary banks, causing delays and added costs.

The BIS said blockchain based systems could reduce these inefficiencies, though it also warned that stablecoins may create financial risks without stronger regulation. As tokenization adoption grows, regulators and financial institutions are increasingly focusing on building secure frameworks for digital finance.