(Bloomberg) — The Bank for International Settlements has brought together some of the world’s largest banks and credit card companies for a blockchain-based project that aims to reorganize cross-border payments around the world.
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JPMorgan Chase & Co., Deutsche Bank AG, UBS Group AG, as well as Visa Inc. and Mastercard Inc. have signed on to the project, called Agora, which launched in May. The full list of private-sector participants includes 41 companies that will join seven central banks from countries including the United States, the euro zone, Japan and Britain.
With Agora (the market in Greek), the BIS envisions the creation of an international platform on which tokenized assets could be bought and sold using digital currencies backed by participating central banks, which issue the world’s most important reserve currencies. On this unified ledger, investors can conduct cross-border transactions using central bank money with virtually no risk. Currently, the only currency that is as safe is cash, of which there is no digital form.
“Given the high level of interest and scale of the Agora project, the BIS chose to work with the Institute of International Finance to bring together private sector participants,” Morten Bech, the project’s lead, told Bloomberg on Tuesday. “This collaboration was very helpful in completing the selection and onboarding process in a timely manner.”
The BIS, headquartered in Basel, is known as the bank of central banks. It transfers funds between monetary institutions and also serves as a research center for them. Its in-house innovation center explores options for improving the global financial system.
Agora is the largest and most complex of these projects in terms of geographic scope and number of participants, the institution said. Another project, called mBridge and supported by Chinese, Asian and Arab central banks, also enables instant cross-border payments and has recently opened up to commercial banks.
Agora “has the potential to lay the foundations for a new regulated financial market infrastructure to facilitate cross-border payments,” the BIS said on its website. “It is about enhancing, through technology, what central and commercial banks already do and enabling greater speed and efficiency.”
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