BIS study shows tokenization could enhance the efficiency and security of cross-border payments.

Huoxing Finance reports that the latest research from Project Agorá, led by the Bank for International Settlements (BIS), shows that tokenization technology has the potential to significantly improve settlement speed and reconciliation efficiency in cross-border payments, while reducing transaction failures and operational risks. The project involves the BIS in collaboration with seven central banks and over 40 financial institutions, including the Federal Reserve Bank of New York, the Bank of England, the Bank of Japan, and the Swiss National Bank. The research concludes that tokenizing central bank reserves and commercial bank deposits can enable “atomic settlement” across currencies and jurisdictions, ensuring transactions are either completed simultaneously or fail simultaneously, thereby mitigating common credit and execution risks in cross-border payments. Project Agorá has completed its simulation testing phase and plans to move into a “real-value” transaction testing phase, exploring on-chain settlement applications for selected currencies and institutions in live funding environments.