Project Agorá Cuts Cross-Border Payment Times to 80 Seconds
Real-value testing (RVT) of tokenization of wholesale cross-border payments demonstrated an average time from payment initiation to settlement of about 80 seconds, according to a report by the Bank for International Settlements (BIS).
Project Agorá, a public-private collaboration exploring tokenization of wholesale cross-border payments, conducted the RVT in a controlled environment in July, the BIS said in a report updated Thursday (July 30).
BIS initially proposed the concept upon which Project Agorá is based, according to the report.
During the July RVT, 28 private-sector financial institutions and central banks across Asia, Europe and North America completed transactions in a selection of currencies totaling about 800,000 Swiss francs (about $990,000), the report said.
The RVT included 17 transaction scenarios, with values ranging from 9,000 Swiss francs (about $11,100) to 125,000 Swiss francs ($155,000), per the report.
“RVT marked an important milestone for Project Agorá, demonstrating the feasibility of settling real-value transactions on a multicurrency programmable and shared platform using tokenized reserves and tokenized deposits,” BIS said in the report.
According to another report linked to the updated one, the RVT demonstrated that tokenization and atomic settlement can provide faster settlement and greater transparency. In addition to seeing the average time from payment initiation to settlement of 80 seconds, participants said they valued the end-to-end visibility of payment status and routing together with the ability to support corporate payment processing on the platform, the report said.
The testing also demonstrated that the prototype can support cross-border payment use cases such as corporate and interbank single- and dual-currency payments, payment-versus-payment (PVP) transactions and intragroup bank transfers. It also showed that the platform can interoperate with diverse external systems across jurisdictions, per the report.
“RVT demonstrated the feasibility of conducting real-value transactions on the Project Agorá platform under realistic operating conditions,” BIS said in the report. “In the testing, issued tokens represented real monetary value, representing central bank reserves and commercial bank deposits.”
The testing is set to continue as Project Agorá progresses, per the updated report.
In an earlier report, the BIS said in May that Project Agorá delivered a prototype that demonstrated tokenized commercial bank deposits could be combined with “the trust and safety” of tokenized central bank reserves using a shared platform.
