Are the world's eight major central banks entering the game to share the stablecoin pie?

Article: Thejaswini M A

Translation: Chopper, Foresight News

Thousands of years ago, the ancient Greek Agora was Athens' public marketplace, where anyone could come, trade freely, with no access barriers, no territorial jurisdiction, "no permission" is the very origin of this word.

The Bank for International Settlements (BIS) named the project Agora, with a thought-provoking intention. However, the Agora project led by BIS, involving seven central banks and over 40 private institutions, is actually designed in stark contrast to the meaning of "free market."

In this system, funds are labeled with their respective countries before transfer; smart contracts automatically perform anti-money laundering screening and sanctions list verification at the token layer; each central bank retains full control over its reserves, and cross-border fund flows must go through a compliance verification layer embedded in the tokens.

In short, this is a programmable fiat currency system that requires prior approval for everything.

The seven central banks participating in the Agora project are: the Federal Reserve Bank of New York, the Bank of England, the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, and the Banque de France representing the Eurozone; the Bank of Canada was added four days ago. Major financial giants such as JPMorgan Chase, HSBC, Deutsche Bank, UBS, Mastercard, Visa, and SWIFT, along with over forty other institutions, are jointly involved in development.

Given the involvement of such a large number of institutions, I decided to analyze this system in depth.

The project architecture adopts a dual-layer separation design: one layer is fully controlled by each country's central bank, responsible for underlying reserve currencies; the other layer is operated by commercial banks, handling daily transactions for end users. Tokenized commercial bank deposits are pooled into a shared platform, with multiple private institutions collaborating on multi-currency clearing; meanwhile, each central bank's reserves are stored independently in their own ledgers, with sovereignty firmly held by each central bank.

BIS aims to build a closed-loop payment system under state control by integrating commercial bank ledgers and anchoring each country's sovereign reserves. The institutions are accelerating compliance frameworks, intending to complete the layout before decentralized stablecoins like Tether fully disconnect global trade from traditional banking systems.

Current cross-border payments resemble a relay race: message transmission, manual compliance verification, and ledger clearing are handled by different systems, often taking days. The Agora project compresses these lengthy multi-step collaborations into a single on-chain real-time operation. This prototype was completed on May 27, 2026, and the Bank of Canada immediately announced participation.

Organizers emphasize that this is still a basic infrastructure test, with no official commercial deployment timetable yet, but the next phase will involve real fund scenarios testing.

Unlike previous central bank reports, the seven major monetary authorities spent two years developing and testing this real-time cross-border clearing system, with the underlying code already operational. The current challenge is no longer technical but how multiple governments will regulate and delineate responsibilities for the shared network, with significant administrative coordination resistance.

The longstanding messaging giant SWIFT is also advancing its underlying infrastructure, positioned at the commercial bank level. On March 30, 2026, SWIFT finalized the design of a blockchain-based shared ledger and entered the minimum viable product (MVP) development stage, planning to launch real-time transactions within the year. The ledger is built on Hyperledger Besu, compatible with the Ethereum Virtual Machine (EVM), but final fund clearing still relies on traditional real-time full payment systems conducted off-chain.

However, SWIFT and Agora are not in competition: SWIFT's ledger focuses on tokenized deposit reconciliation between commercial banks, while Agora handles the final large-scale settlement of central bank reserves. BIS designed the two systems to be interoperable from the start, gradually transforming the traditional cross-border clearing system into a programmable digital network in two steps.

A closer look at the participant list reveals significant overlaps: Deutsche Bank is both a core member of Agora and has partnered with Goldman Sachs, Bank of America, Barclays, Santander, and others to explore issuing 1:1 reserve-backed tokens on public blockchains; UBS and Citibank are involved on both sides; JPMorgan participates in Agora and operates its own JPM Coin, and recently launched cross-border clearing pilot on the Ripple ledger.

Such dual involvement is unusual in finance: institutions typically concentrate their technical resources on one technology path. The top teams simultaneously develop two competing solutions, reflecting internal disagreements among bank management. Giants holding vast data and huge funds cannot predict which framework will ultimately succeed. The technical paths are clear, but policy directions are highly uncertain.

Ripple has been advocating for "atomic settlement" as the optimal solution for cross-border payments for a decade (atomic settlement means transactions are either fully completed or canceled entirely). Now, the BIS Agora project implements this logic, replacing XRP with central bank reserve tokens as the settlement medium, directly reducing XRP's necessity as a cross-border bridge asset.

Yet, Ripple's ledger continues to penetrate traditional finance. On May 6, JPMorgan's Kinexys, Mastercard, Ripple, and Ondo Finance completed the first tokenized US debt cross-border redemption on Ripple, with full settlement in under five seconds. Ripple's USD stablecoin RLUSD surpassed a market cap of $1.4 billion; by January 2026, the total tokenized assets on Ripple exceeded $2 billion; Societe Generale issued euro stablecoins on Ripple in February; and in December 2025, Ripple obtained a limited trust bank license from the U.S. Office of the Comptroller of the Currency (OCC).

Ripple's architecture has been validated, but the assertion that "XRP is indispensable" has not materialized. Nonetheless, Ripple continues integrating into institutional clearing systems, and the long-term significance of this surpasses the debate over whether Ripple or central bank reserve tokens are superior.

Beyond commercial hype, transactions on Ripple are very low-cost and permanently fee-free, with fees not flowing to node operators. Institutional transaction volumes do not generate profits for validators or token holders like Ethereum Gas fees; instead, they slightly burn XRP holdings. When institutions transfer tokenized assets on-chain, they use their own funds, not relying on circulating XRP for liquidity, with the network providing fast transfers and cryptographic security.

The core value of this model lies in ecosystem binding. Once financial institutions trust this network to custody fiat and stablecoins, the technology will embed into global financial infrastructure, pushing banks to deploy node facilities, and the ledger will become a fixed component of the global financial system. In the long run, deeply integrating the technology with the banking industry is more important than the price fluctuations of a single token.

All these variables ultimately converge on the stablecoin track. Tether's daily trading volume remains stable between $40 billion and $50 billion, with the total stablecoin market reaching $320 billion. While Agora is still in the pilot stage with no clear landing date, SpaceX has already used stablecoins for cross-border corporate funds, and Western Union has launched remittance services on the Solana blockchain, indicating market competition has already begun.

Agora aims at wholesale cross-border clearing for large institutions. If successfully implemented, it could divert the demand for enterprise cross-border funds currently served by stablecoins. However, this market is only a small part of stablecoin applications: Brazil's Central Bank issued Law No. 561, banning local financial institutions from using stablecoins for cross-border payments, but it cannot prevent Brazilians from holding US dollar stablecoins for value preservation; Turkey's retail investors buy USDT to hedge against lira inflation, but such scattered demand is outside Agora's scope.

In the short term, stablecoins and Agora are more complementary than competitive, with application scenarios almost non-overlapping: Agora is a closed institutional network, limited to central banks or licensed banks authorized by central banks; ordinary people holding dollars for risk hedging, and small to medium payment companies relying on public blockchains for cross-border remittances, cannot access this system. The official closed-loop system cannot achieve the inclusive speed of public blockchains, and stablecoins on public chains cannot meet the final settlement requirements of central banks.

The mid-term landscape is more complex. Currently, corporate finance teams use USDC and USDT for cross-border settlements mainly because traditional correspondent banks are slow and costly. If Agora is successfully deployed with sufficient liquidity, some corporate funds may shift. Given comparable clearing efficiency, CFOs will prioritize official channels under sovereign regulation, without third-party credit risks.

However, the challenge of unified governance rules among the seven central banks remains a top-tier global issue; many past cross-border projects have failed at this stage. Meanwhile, many large enterprises have already integrated with USDC systems and built mature risk control processes, unlikely to overhaul existing operations solely because of a theoretically superior new system.

Ultimately, the market is likely to stratify: Agora monopolizes large-scale institutional cross-border channels, while public chain stablecoins maintain retail and scattered business. It may seem like a split market, but in reality, sovereign systems have locked down the boundaries of public chains, confining decentralized networks to areas that do not threaten traditional intermediaries—remittances, resident savings, and small payments in emerging markets. These markets are sizable but not central to the global financial leverage.

This market stratification will soon be tested: the EU Pontes framework will connect various distributed ledgers with the core European clearing system TARGET by September 2026, with only three months remaining. If successful, tokenized payments by European institutions can directly reach central banks, marking the official start of a face-off between official systems and open public blockchains.

The ancient Agora marketplace of Athens declined because people no longer came to trade in person. That is ultimately the measure of all financial networks.