The Bank for International Settlements (BIS) has launched a project to modernize cross-border transfers through tokenization. The initiative is backed by several central banks and the financial institution led by Ana Botín. The stated goal is to reduce costs, accelerate timelines, and eliminate intermediaries in cross-border payments, a market that remains hampered by slow processes and restrictive hours.
Tokenization and Atomic Settlement: How the New System Works 🔗
The project, known as Agorá, uses distributed ledger technology to tokenize bank deposits and digital assets from central banks. The key is atomic settlement: all transactions are executed simultaneously or not at all, eliminating counterparty risk. Although the system promises to reduce current times from 3-5 days to minutes, its actual implementation requires harmonizing regulations between countries and banks adapting their internal systems. For now, it is a technical pilot.
Goodbye to the Three-Day Wait (Maybe by 2030) ⏳
For the average person, the news sounds like they will finally be able to send 50 euros to their cousin in Argentina without paying a fee that doubles the transfer. But beware: this is a project between central banks and large institutions. Most likely, when tokenization arrives, banks will have found a new fee called the express tokenization rate. In the meantime, we still have to wait those three business days, which always fall on a holiday.