The Bank of Canada announced on May 27 that it is joining the Bank for International Settlements’ Project Agorá, an initiative aimed at exploring how tokenization could improve wholesale cross-border payments.
Project Agorá has tested the feasibility of a multi-currency unified ledger that enables atomic settlement of cross-border wholesale transactions. The prototype combines tokenized commercial bank deposits and wholesale central bank money on a programmable platform, with the goal of enhancing speed, efficiency, transparency and accessibility in international payments. The project will continue to test its prototype and assess how such a platform could function within existing legal and regulatory frameworks, including those related to settlement finality and anti-money laundering laws.
Project Agorá brings together central banks and private sector financial institutions to experiment with next-generation payment infrastructure. The Bank of Canada said this aligns with its research focus on evolving payment systems and leveraging emerging technologies for greater financial system efficiency. “We know that the Canadian economy could benefit from innovation in cross-border payments,” said Senior Deputy Governor Carolyn Rogers. “Tokenization has the potential to make these payments faster, cheaper, more efficient and secure. Project Agorá is a unique opportunity to test the technology across several jurisdictions and currencies, with the participation of private sector financial institutions.”
The global project involves seven other central banks—the Federal Reserve Bank of New York, Bank of England, Bank of France (representing the Eurosystem), Bank of Japan, Bank of Mexico, Swiss National Bank and Bank of Korea—and includes more than 40 financial institutions such as systemically important banks, payment service providers and clearing houses.
The Bank of Canada strives to maintain price stability while fostering economic growth by overseeing monetary policy and financial systems; it also manages currency operations as well as digital payments regulation within Canada’s retail payment systems, according to its official website.
