In order to investigate how tokenizing wholesale central bank currency and commercial bank deposits on programmable platforms can enhance the monetary system, the central banks and the private sector intend to collaborate on Project Agorá.

The initiative will look into how tokenized commercial bank deposits and tokenized wholesale central bank money can be smoothly linked in a public-private programmable core financial platform, building on a unified ledger concept that the BIS proposed last year.

According to the BIS, this may preserve the two-tier structure of the monetary system while improving its operation and offering new solutions through the use of programmable logic and smart contracts.

The primary goal is to reduce expenses while accelerating and maintaining the integrity of international payments.

Participating banks include the Federal Reserve Bank of New York, Bank of France, Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank, Bank of England, and Bank of England. The Institute of International Finance has brought together "a large group of private financial firms" with whom they will collaborate.

Today, in order to combine several payment systems, accounting ledgers, and data registries, further sophisticated systems are needed, according to Cecilia Skingsley, head of the BIS Innovation Hub. We aim to investigate in Project Agorá a new common payment infrastructure that might unify all these components and potentially improve system efficiency on a digital core financial infrastructure.

Not only will we test the technology, but we will also test it within the specific operational, regulatory, and legal conditions of the participating currencies, alongside financial companies operating in those currencies.