Bank of Korea Joins Agora Project to Enhance Cross-Border Payments

The Bank of Korea has announced its participation in the Agora project, a collaborative effort with six major banks, including Kookmin, Enterprise, Nonghyup, Shinhan, Woori, and Hana.

The Agora project aims to explore the feasibility of improving cross-border payment issues by converting bank deposits and institutional central bank money into digital money, also known as tokenization.

Currently, overseas payments are often criticized for being expensive and slow due to differences in laws and regulations, technical compliance requirements, and standard time zones between countries. The Agora project seeks to address these issues using blockchain technology.

The project involves central banks and private institutions from seven countries, including the five major reserve currency countries (USA, France, UK, Japan, and Switzerland), Korea, and Mexico.

Through this project, the Bank of Korea and the six participating banks will study the integration and use of tokenized deposits and tokenized central bank money in a financial platform jointly operated by the public and private sectors.

The study will examine the feasibility of a two-tier structure, where the six banks accept deposits from customers and the central bank provides reserves for deposit withdrawals and interbank fund transfers.

Additionally, the project will explore the use of smart contract programming, which enables the automation of trade goods and payment transactions using tokens and GPS technology.

Smart contracts have the potential to streamline international trade by programming tokens to trigger payments and transactions when certain conditions are met.