Korean Banks Complete Verification for International Payment Project Agora

Domestic banks are accelerating the verification of next-generation international payment infrastructure.

KB Kookmin, Shinhan, Woori, and NH NongHyup Banks announced on May 28 that they have completed the prototype verification for the 'Project Agora,' led by the Bank for International Settlements (BIS) and the Institute of International Finance (IIF).

The Agora Project is a public-private partnership aimed at verifying the feasibility of efficient cross-border payments using central bank digital currencies (CBDCs) and deposit tokens.

Central banks from seven countries, including South Korea, the United States, France, the United Kingdom, Japan, Switzerland, and Mexico, along with over 40 financial institutions, have participated, with the Bank of Canada recently joining. In South Korea, six banks, including KB Kookmin, Shinhan, Hana, Woori, NH NongHyup, and IBK Industrial Bank, are involved in the initiative.

Currently, the cross-border payment system is hampered by a structure that involves multiple intermediaries, resulting in slow transfer speeds, high costs, and a lack of transparency in transactions.

To address these inefficiencies, participating institutions examined the feasibility of implementing real-time simultaneous payments based on multiple currencies, enhancing cross-border payment efficiency, and maintaining currency uniformity in a tokenized environment during the prototype verification. Tokenization refers to the technology that converts deposits or financial assets into blockchain-based digital assets.

These banks plan to participate in upcoming real transaction tests based on their experience with Project Agora. The real transaction tests will go beyond prototype verification to assess the applicability of the payment structure based on actual value transfers. The four banks will evaluate the global payment potential of won-based deposit tokens by linking their headquarters with overseas networks.