Forty private financial institutions, including commercial banks JPMorgan, HSBC and UBS, and seven central banks have responded to an invitation from the Institute of International Finance (IIF) to join a pilot project to create a digital currency platform to accelerate and improve cross-border payments.
Conceived by the Bank for International Settlements (BIS), the project currently has just one African institution involved, the Egyptian bank Amina.
The Agora project is structured as a public-private collaboration, with the aim of seeing whether so-called “tokenized” bank deposits can be used in combination with tokenized central bank digital currencies in a faster and more advanced system.
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At the design stage, the project brings together seven central banks, which will work in partnership with financial companies selected by the IIF, an institution that will act as a coordinating partner for the private sector, the BIS reports.
"The project builds on the unified ledger concept proposed by the BIS and will investigate how tokenized commercial bank deposits can be seamlessly integrated with tokenized central bank money on a programmable public-private central financial platform.“, stresses the BIS, reiterating that this platform will be able to “improve the functioning of the monetary system and provide new solutions” using “smart contracts and programmability".
The "Smart contracts can enable new forms of settlement and unlock transactions that are not viable or practical today.“, offering companies and people new opportunities, highlights the Bank for International Settlements.
