Seven central banks find atomic settlement could cut intermediaries and settlement risk
Project Agorá, a Bank for International Settlements initiative, published findings today showing that tokenizing central bank reserves and commercial bank deposits on blockchain could materially improve cross-border payment speed and reliability. The Federal Reserve Bank of New York, Bank of England, Bank of Japan, Swiss National Bank, and Bank of Canada are among seven central banks participating in the project, alongside more than 40 private financial institutions.
The core innovation centers on atomic settlement, a mechanism where transactions complete on an all-or-nothing basis. This eliminates a primary operational risk in today’s cross-border system: one side of a payment succeeding while the other fails. Current international transfers route through multiple intermediary banks before reaching their destination, often taking days to settle and creating cascading operational exposure.
Bank of Canada joined the initiative this week, expanding the project’s geographic footprint. The participants plan to move beyond simulations toward testing real-value transactions involving some currencies and institutions, though the project did not specify which currencies or institutions will participate in the next phase or when real-value testing will begin.
The tokenization approach aligns with broader infrastructure shifts across Wall Street. The Depository Trust and Clearing Corporation (DTCC) plans to roll out tokenized settlement infrastructure for stocks, ETFs, and U.S. Treasuries. Both Nasdaq and Intercontinental Exchange are developing blockchain-based systems for tokenized stocks, signaling institutional appetite for on-chain settlement rails.
Project Agorá’s work occurs against a backdrop of regulatory caution toward private stablecoins. The BIS has warned that stablecoins could pose systemic risks and has urged speedier regulation, positioning central bank-backed tokenization as a more controlled alternative for settling value across borders.
The initiative does not yet provide specific metrics on speed improvements or cost reductions from tokenization, leaving questions about concrete performance gains relative to existing correspondent banking networks. The next phase will test whether atomic settlement on blockchain can deliver those gains at scale across multiple jurisdictions and currencies.
