Karsten Wenzlaff, Advisor
August 26th, 2025
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Project Agorá Tests Real Money Bank Settlement Rails
May 28, 2026 | NCFA Insight | Payments And Market Infrastructure, Digital Assets Blockchain And Tokenization, Capital Markets And Market Infrastructure
Bank Of Canada Joins Next Phase Of Tokenized Bank Settlement
On May 26, 2026, the BIS released its 97 page Project Agorá report, detailing how a global public private prototype tested the feasibility of tokenized commercial bank deposits and wholesale central bank money for cross border payments. The report explains the project vision, who participated, what the prototype tested, what worked (or not), and what has to happen before any production system can operate at scale.
Project Agorá isn't a retail CBDC project, nor is it a stablecoin clone. It tests whether today’s correspondent banking system can use tokenized bank money and smart payment workflows to make wholesale cross border payments faster, safer, more transparent, and easier to coordinate.
Cross border payments totalled USD $195 trillion in 2024 and are projected to reach USD $320 trillion by 2032. Wholesale payments accounted for 91% of cross border payment value in 2023. These flows affect banks, PSPs, exporters, capital markets firms, treasury teams, and fintechs building around global money movement.
Bank Of Canada Joins The Next Phase
On May 27, 2026, the Bank of Canada joined Project Agorá, giving Canada a seat at the table and role in the next phase of testing. The Bank says the project has successfully tested the feasibility of a multi currency unified ledger that enables atomic settlement of wholesale cross border transactions.
The next phase will continue testing the prototype and examine how an Agorá type platform could operate under existing legal and regulatory frameworks, including settlement finality, anti money laundering rules, and terrorist financing rules.
Carolyn Rogers, Senior Deputy Governor, Bank of Canada:
“We know that the Canadian economy could benefit from innovation in cross-border payments. Tokenization has the potential to make these payments faster, cheaper and 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.”
Agorá Tests Programmable Bank Money
Project Agorá was convened by the BIS and the Institute of International Finance. It originally brought together 7 central banks and more than 40 regulated financial institutions, including banks, payment service providers, financial market infrastructures, and global payment networks.
The central bank group includes 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, Bank of Korea, and now the Bank of Canada for the next phase. That makes Agorá a multi currency and multi jurisdiction test, not a single bank proof of concept.
See: AI, Capital, Money Rewire Financial Infrastructure In 2026
The project keeps correspondent banking as the base model. Banks still manage customers, deposits, access, compliance, and balance sheet relationships. Central banks still control reserves and domestic policy settings. Agorá adds a shared programmable platform to coordinate the payment workflow.
How The Platform Would Work
The prototype uses a two layer architecture. (1) A unifying ledger records tokenized commercial bank deposits and coordinates the cross border workflow. (2) Separate jurisdictional ledgers record tokenized central bank reserves so each central bank keeps control over its own money, access rules, and policy settings.
The payment workflow has five stages. Agorá checks the payee, finds the payment route, confirms required checks, locks the needed balances, then settles the transaction. In report terms, those stages are confirmation of payee, path discovery, validation, locking, and settlement.
The order sequencing matters. Agorá checks the payment before banks lock up liquidity. It confirms the payee, route, required checks, and available balances first. Only then does settlement begin. That reduces the risk of finding a problem after money has already been committed.
Source: Bank for International Settlements, Project Agorá, “Wholesale cross border payments today and in Project Agorá,” Figure 1.
Atomic Settlement Worked In The Prototype
The prototype showed that atomic settlement is achievable in a tokenized environment across the participating jurisdictions. This means that either every required balance update happens, or none of them happen. One leg of a transaction cannot settle while another fails.
The report says settlement can occur in seconds once funds or liquidity are locked. The platform is also designed to operate around the clock, which could reduce delays caused by time zones and market hours. That doesn't mean every payment becomes instant from start to finish. It means the settlement step can happen quickly after the required checks and liquidity locks are complete.
The prototype also showed that shared infrastructure doesn't require shared data by default. Participants can coordinate payment status, validation outcomes, and settlement without exposing customer data, internal risk models, or sensitive routing information to everyone on the platform.
The Pain Points Are Operational
The report identifies specific pain points in wholesale cross border payments. They include mismatched operating hours, sanctions and compliance false positives, serial processing, poor data quality, weak payment status visibility, unclear fees, liquidity pressure, settlement risk, reconciliation breaks, and client outreach.
See: CBDC Tokenization And Stablecoin Design For Fintechs
These are practical banking problems. A false positive can stop a legitimate payment. A missing data field can trigger manual review. A payment status gap can leave banks and clients unsure where funds are stuck. A reconciliation break can create cost after settlement. Liquidity sitting in the wrong place can weaken treasury efficiency.
The report doesn't make cost reduction the main objective because many wholesale payment costs come from FX pricing and market structure. The stronger claim is narrower though. Fewer failed payments, investigations, returns, and reconciliation breaks could reduce operating drag if the model works in production.
Compliance Stays With Each Institution
Agorá doesn't try to centralize AML, counter terrorist financing, sanctions, fraud, or policy decisions. Each institution still performs its own checks inside its own systems. The platform coordinates only the outcomes needed to move the workflow forward.
This is important for banks who need shared infrastructure, but they don't want to expose customer information, proprietary screening logic, or internal compliance decisions to every other participant in a payment chain. Agorá uses scoped privacy and controlled information sharing so only relevant parties receive the data they need.
The result is a realistic compliance model for regulated institutions. It doesn't remove compliance work. It tries to reduce duplication, bring validations earlier in the process, and stop settlement from starting before required checks are complete.
Tokenized Money Keeps Its Legal Nature
The report’s legal analysis as tested in Agorá, found that tokenization doesn't fundamentally change the legal nature of money. Tokenized central bank reserves remain central bank reserves. Tokenized deposits remain commercial bank deposit obligations.
See: VersaBank USA Launches Tokenized Deposits Pilot
It suggests tokenized bank money can develop inside existing legal and regulatory frameworks instead of starting from a blank page. It also separates Agorá from private digital asset models where the legal nature of the claim can be less familiar.
The report doesn't claim every legal issue is solved however. Settlement finality is achievable across the participating jurisdictions, but production deployment would still need rulebooks, contractual frameworks, liability rules, governance, data rules, insolvency treatment, and clear legal effect across jurisdictions.
Benefits And Risks For Banks And Fintechs
The strongest benefits are operational. Agorá could give banks better payment status visibility, earlier data checks, fewer late stage failures, faster settlement after liquidity is locked, and more predictable workflows across currencies.
Treasury teams could benefit from better liquidity coordination. Cross border payments today can require prefunding, manual investigation, and treasury allocation across time zones. Agorá’s design could reduce some of that friction by coordinating payment paths, validations, balance locks, and settlement in one workflow.
The risks are in production execution. The report says the prototype didn't prioritize production grade performance, cyber security, or liquidity saving tools. It also left FX integration and other tokenized asset classes outside scope.
A real system would need to connect with existing bank infrastructure and prove it can operate under stress. That means strong governance, resilience testing, failover, monitoring, and clear performance benchmarks.
What To Watch Next
The Bank of Canada is now involved, but commercial value depends on private sector participation. Canadian banks, PSPs, market infrastructure providers, and fintechs need a role in testing, rule design, and integration.
For fintechs, the opportunity is to build around the workflow through compliance tools, privacy technology, treasury systems, FX routing, liquidity optimization, reconciliation software, APIs, and analytics.
See: Tokenization Finds Scale In Collateral And Cash
Agorá gives banks and central banks a regulated alternative to stablecoin settlement networks, but only if the next phase proves it can handle real value, real liquidity, and real operating rules.
Talking Point
If Project Agorá evolves from prototype to real value settlement, will tokenized bank deposits become the regulated answer to stablecoin driven cross border payments?
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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