The main and annex buildings of the Bank of Korea headquarters in Jung-gu, Seoul. [Herald DB]
The main and annex buildings of the Bank of Korea headquarters in Jung-gu, Seoul. [Herald DB]

The Bank of Korea said it participated in a live transaction pilot under Project Agora, conducting interbank transfers of won and other currencies using tokenized central bank reserves.

The central bank confirmed Thursday that the pilot, carried out this month, verified that the core functions and operational procedures of the Agora platform prototype can run stably in an environment closely resembling actual operations.

Project Agora is a global initiative exploring ways to improve the efficiency of cross-border payments by using tokenized central bank reserves and tokenized commercial bank deposits. The Agora platform was built to validate the core architecture and operational processes that can function within existing institutional and regulatory frameworks.

The pilot was open to institutions that wished to take part. A total of 28 institutions — including central banks and private financial institutions — participated, covering a range of currencies: the Korean won, US dollar, euro, British pound, Swiss franc and Japanese yen. Among domestic banks, KB Kookmin, NH NongHyup, Shinhan, Woori and Hana Bank all took part.

The pilot covered 17 transaction scenarios, including single-currency transfers (between banks, between companies, and within the same financial group), dual-currency transfers (between banks and between companies), and payment-versus-payment foreign exchange settlement.

A single-currency transaction involves one institution sending a payment to another in the same currency — for example, institution A sending won and institution B receiving won. A dual-currency transaction involves a currency conversion: institution A sends won while institution B receives the equivalent in dollars. Payment-versus-payment settlement refers to the simultaneous exchange of payments in different currencies.

The Bank of Korea conducted the pilot alongside NH NongHyup Bank and Shinhan Bank, focusing on interbank won transfers of 20 million won ($13,800) using tokenized reserves. The central bank received payment instructions from the two banks and issued, transferred and redeemed tokenized reserves through the Agora platform. The process involved manually linking the Han River platform with the Bank of Korea's financial network, BOK-Wire+.

Project Agora plans to identify additional transaction types and scenarios not covered in this round and conduct further live transaction tests. Institutions that are part of Project Agora but did not participate in this pilot may also join future rounds if they wish.

The Bank of Korea said it plans to "continue actively participating in Project Agora and comprehensively review ways to establish connectivity and interoperability between the Han River platform and the Agora platform."


kimstar@heraldcorp.com