Stablecoins have spent years establishing themselves as the go-to way to move money across borders. Now, the banks want a piece of that market.
Tokenized deposits have emerged as the banking industry’s answer, with some of the world’s leading commercial and central banks exploring the technology under the banner of Project Agorá. A report from Javelin Strategy & Research, BIS Project Agorá: A Road Map to Tokenized Deposits for FIs, looks at how these two approaches are developing and what the market may have in store for them.
As it stands, Project Agorá is moving from experimentation toward real-value testing and a potential blueprint for tokenized deposits—which means banks and other financial institutions need to be asking their partners the hard questions now.
Where Project Agorá Stands
Initially proposed by the Bank for International Settlements (BIS), Project Agorá is one of the most ambitious tokenization initiatives the world has yet seen. BIS and the Institute of International Finance brought together seven central banks and more than 40 regulated FIs from across the globe to explore whether tokenization and distributed ledger technology can improve cross-border payments in concert with the existing financial system.
Many of the world’s largest banks, payment providers, and financial market infrastructure providers are participating in Project Agorá. The project has now delivered a working prototype demonstrating that tokenized commercial bank deposits can be combined with tokenized central bank reserves on a shared platform, including atomic settlement across currencies and jurisdictions.
Agorá’s progress can be seen in its latest report, from May 2026. It makes clear that central and commercial banks are preparing to compete with stablecoins through tokenization, while emphasizing the potential benefits of both approaches and preserving the existing two-tier banking system.
The bigger question is what form tokenized money should take, and who should issue and control it. Rather than relying on privately issued stablecoins, Project Agorá’s architecture applies tokenization to commercial bank deposits and central bank money.
“The narrative has shifted from crypto disruption and eliminating banks, all this sort of thing,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin. “Agorá has shown that they realize the benefits of stablecoins and tokenized deposits, shifting the narrative to how banks and central banks can incorporate those things and still keep a two-tiered system. Their biggest goal is to create a framework for institutions around the world. identify the risks, and implement a go-to-market or roadmap strategy of how banks can best do this.”
Why Banks Aren’t Signing On
To this point, many banks have resisted trying out tokenized deposits, and there are a variety of reasons behind this reluctance.
“Regulatory concerns are definitely a big part keeping them back,” Hugentobler said. “But it’s also kind of a complacency. They’ve been using the same system for 50 years. They’re used to the way things are going. Doing a complete overhaul is a big undertaking.”
Before any bank can move forward, it has tostart with education, identifying the risks, and learning about the infrastructure involved. And, of course, management has to have an open mind about pursing these new ideas. But if a financial institution hesitates about signing on, competitors may end up making the rules. They could find themselves joining later on someone else’s infrastructure if they wait too long.
Many of the nation’s leading banks are already participating in Agorá. For instance, JPMorgan, one of the biggest banks in the world with the budget to build systems like Connexus, is part of the Agorá group. It’s the regional banks that are watching and wondering if they should jump in.
“My dad is a commercial lender for Zions Bank, and he gets on these corporate calls and he said that we’re always trying to do what JPMorgan’s doing,” said Hugentobler. “Some of those smaller regional banks are limited on what they can build out. Banks don’t have to build out their own network, every single one. But if you look at some of these big players with the bankroll, they see this is where it’s going.”
Regulators Creating Clarity
Another positive sign for tokenized deposits is that regulatory and market-infrastructure organizations such as the Depository Trust & Clearing Corporation and the International Continental Exchange, among the biggest clearinghouses and exchanges overseeing quadrillions of dollars in assets and the settlement of futures and equities around the globe, are becoming more involved.
Exactly how they will move forward remains to be seen, which means it will take some time for tokenized deposits to really take fire. Until then, stablecoins are likely to retain the greater share of the market.
“Once tokenized deposits do start coming out, it may be that stablecoins remain more focused on business to business or retail cross-border or business cross-border payments,” Hugentobler said. “Tokenized deposits are more of a liquidity or treasury management tool, so it’s too early to tell.”
The Animosity May Be Cooling
There has been a legacy of antipathy between the tokenized deposit movement represented by Agorá and the crypto community. Bitcoin originated as an alternative system after the global financial crisis, fueled in part by distrust of traditional financial institutions and central banks. Now that traditional financial institutions are incorporating these systems and the BIS is getting involved, there’s some lingering hostility towards the BIS—or at least toward the feeling that new frontiers in payments are being taken over.
But both sides are willing to coexist.
“At the end of the day, the BIS recognizes this technology and the benefits it offers,” Hugentobler said. “That’s why it’s trying to build a roadmap.”
