A blockchain-based payment system backed by seven major central banks and 40 large financial institutions has been successfully tested, demonstrating near-instant and cheap settlement of cross-border payments. The project, known as Project Agorá, was spearheaded by the Bank for International Settlements and the International Institute of Finance and involves institutions including JPMorgan Chase, HSBC, BNP Paribas, Visa, UBS and MUFG Bank, alongside central banks from the US, UK, EU, Japan, South Korea, Switzerland and Mexico. The Bank of Canada is joining for the next phase.
The system works by tokenising commercial bank deposits — converting them into digital tokens on a shared distributed ledger — and settling transactions almost instantly through what is called atomic settlement, using tokenised central bank reserves. The tests confirmed that transactions could be completed while maintaining privacy protections and anti-money laundering checks and without requiring changes to existing legal frameworks. The tests so far have been synthetic, meaning no real money has crossed borders yet, but participants plan to move to live cash transfers soon. “The key is to get this right rather than some particular timeline,” said Tim Adams, head of the IIF.
The Problem It Is Designed to Solve
Most cross-border payments today move through the correspondent banking system — a slow, expensive, and opaque chain of intermediary lenders that has been widely criticised for decades but never meaningfully reformed. A payment from Lagos to London, for example, can take days and pass through multiple banks, each taking a fee and introducing delay. Project Agorá is designed to preserve correspondent banking as the structural backbone of global payments while replacing its mechanics with blockchain technology that settles transactions in near real time.
The BIS and IIF described the successful test as laying “the groundwork for next-generation solutions”, adding that the project “demonstrates that a shared distributed ledger technology platform can support safe settlement in a tokenised environment.”
The Establishment Is Fighting Back Against Stablecoins
The timing and composition of Project Agorá are not coincidental. The cross-border payments market is under serious competitive pressure from US dollar-backed stablecoins, dominated by Tether and Circle, which already offer fast, cheap, borderless transfers of dollar-denominated value to anyone with a crypto wallet. Central banks and traditional financial institutions have watched that market grow rapidly and are now responding with a system that offers similar technical capabilities within a regulated, institutionally governed framework.
The project also draws a visible geopolitical line. The participating institutions are led by Western and allied nations — the US, UK, EU, Japan, South Korea, Canada and Switzerland. This puts Project Agorá in direct contrast with Project mBridge, a rival cross-border payment system led by the Chinese central bank that the BIS quietly exited in 2024. Two competing blockchain-based payment architectures, one aligned with Western financial institutions and one led by Beijing, are now developing in parallel.
For anyone who has followed the stablecoin debate closely, Project Agorá represents something significant. The consistent criticism of central bank digital currency projects has been that they move too slowly, involve too many stakeholders, and will never match the user experience of crypto-native solutions. A successful synthetic test involving JPMorgan, HSBC, Visa and eight central banks does not answer all of those criticisms. But it signals that the institutional financial system has identified blockchain settlement as the direction of travel and is now moving deliberately toward it — with or without the crypto industry’s involvement.
