Korean Banks Complete Verification of International Payment Project Agora

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

KB Kookmin, Shinhan, Woori, and NH NongHyup Bank 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 whether central bank digital currencies (CBDCs) and deposit tokens can facilitate efficient cross-border payments.

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 in the project, which recently welcomed the Bank of Canada. Six South Korean banks, including KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, NH NongHyup Bank, and IBK Industrial Bank, are involved in the initiative.

Currently, the cross-border payment system faces challenges such as slow transfer speeds, high costs, and a lack of transparency due to the involvement of multiple intermediaries.

To address these inefficiencies, participating institutions examined the feasibility of implementing real-time, multi-currency simultaneous payments, 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 future 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.