(Bloomberg) -- The Bank for International Settlements has lined up some of the world’s largest banks and credit card companies for a blockchain-based project that aims to overhaul cross-border payments worldwide.
JPMorgan Chase & Co., Deutsche Bank AG, UBS Group AG, as well as Visa Inc. and Mastercard Inc., have signed up to the project, named Agora, which was launched in May. The full list of private-sector participants includes 41 companies that will join seven central banks from jurisdictions including the US, the euro area, Japan and England.
With Agora — Greek for market — the BIS is exploring the creation of an international platform on which tokenized assets can be bought and sold using digital currencies backed by the participating central banks, which issue the world’s most important reserve currencies. On this unified ledger, investors can trade across borders using virtually risk-free central-bank money. Currently, the only comparably safe money is cash, of which no digital form exists.
“Given the high level of interest in Project Agora and its large scale, the BIS chose to work with the Institute of International Finance to convene the private sector participants,” project lead Morten Bech told Bloomberg on Tuesday. “This collaboration was very helpful in being able to complete the selection and onboarding process in a timely manner.”
The Basel, Switzerland-based BIS is known as the bank of central banks, which means that it transfers money between monetary institutions and also serves as a research center for them. Its in-house Innovation Hub is investigating different options for improving the world’s financial system.
Agora is the largest and most complex of those projects in terms of geographical scope and number of participants, the institution said. Another project, called mBridge and backed by Chinese, Asian and Arabic central banks, also allows instant cross-border payments and recently opened to the participation of commercial banks.
Agora “has the potential to lay the foundation for a new regulated financial market infrastructure to facilitate cross-border payments,” the BIS said on its website. “This is about improving, via technology, what central and commercial banks already do today and enabling greater speed and efficiency.”
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