Bank for International Settlements: Tokenization may significantly improve the efficiency and security of cross-border payments

Recent Project Agorá research led by the Bank for International Settlements (BIS) shows that tokenization technology is expected to significantly improve settlement speed and reconciliation efficiency in cross-border payments, and reduce transaction failure and operational risks. The project is jointly participated by BIS with seven central banks and more than 40 financial institutions, including the Federal Reserve of New York, Bank of England, Bank of Japan and SwissNational Bank. Research believes that tokenizing central bank reserves and commercial bank deposits can support cross-currency and cross-jurisdiction "atomic settlement", achieving "simultaneous completion or simultaneous failure" of transactions, thereby reducing common credit and execution risks in cross-border payments. Currently, Project Agorá has completed the simulation testing phase and plans to enter the "real-value trading" testing phase to explore the on-chain settlement applications of some currencies and institutions in a real capital environment.