The BIS and seven central banks have partnered with the private sector to explore tokenisation's impact on the monetary system. The Bank for International Settlements (BIS) and seven central banks have announced their collaboration with the private sector to investigate how tokenisation can enhance the operation of the monetary system.

Project Agorá, named after the Greek word for marketplace, brings together seven central banks: the Bank of France (representing the Eurosystem), the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, the Bank of England, and the Federal Reserve Bank of New York. They will partner with a large group of private financial firms convened by the Institute of International Finance (IIF). This initiative builds on the concept of unified ledger proposed by the BIS and will explore how tokenised commercial bank deposits can be smoothly integrated with tokenised wholesale central bank money in a public-private programmable core financial platform.

The aim is to improve the functioning of the monetary system and offer innovative solutions using smart contracts and programmability, while retaining its two-tier structure. Smart contracts have the potential to revolutionise settlement methods and enable transactions that are currently impractical or unviable, thereby creating new opportunities for businesses and individuals. This significant collaboration between the public and private sectors aims to address various structural inefficiencies in payment systems, particularly across borders.

Challenges include differing legal, regulatory, and technical requirements, as well as disparities in operating hours and time zones. Moreover, there is a need to simplify financial integrity controls, such as anti-money laundering measures and customer verification, which are often duplicated for the same transaction due to multiple intermediaries. Projects initiated by the BIS Innovation Hub are experimental in nature and aim to explore and provide public goods to the global central banking community.

The next step involves the BIS issuing a call for expressions of interest from private financial institutions to participate in Project Agorá. The IIF will serve as the intermediary and convener of private sector participants. It is anticipated that several regulated financial institutions will take part, representing each of the seven currencies.

Specific instructions and requirements will be communicated in due course, and membership in the IIF is not a prerequisite for participation. .