Major banks collaborate on new digital currency platform

Forty of the world’s top commercial banks have joined a new digital currency pilot known as the Agora project in collaboration with the New York Federal Reserve and several central banks from Europe, Korea, and Japan. The initiative aims to explore the use of tokenised bank deposits and central bank digital currencies (CBDCs) to improve cross-border payment systems. Specifically, it focuses on ‘wholesale’ CBDCs, which are used between banks.

The project will address the complexities of cross-border transactions, such as time zone differences, legal frameworks, and varying regulatory and technical systems. Major banks participating include JPMorgan, HSBC, UBS, and Japan’s MUFG.

Led by the Bank for International Settlements and the Institute of International Finance, Agora differs from another CBDC project called mBridge. It involves central banks from China, Hong Kong, Thailand, the UAE, and Saudi Arabia.