Blockchain fragmentation is serious thing. And it's not just the decentralized world that suffers from it but also the centralized world. In case of the govt, the effort becomes more costly to maintain the chain and then keep it growting.
In case of the asset custody and tokenization, there are multiple banks and the consumer assets which are fragmented over the chains and there seems to be lack of centralized bridge from the govt and the banks. This is about to change with the efforts of some organizations.
In EU there is this Bank for International Settlements (BIS) that is coming up with a project Agora initiative. This is going to make the tokenization across borders, banks and the national treasury lot easier to maintain and centralize for the verification and validation.
Let's take a look at how this project works and what are the future plans of such efforts.
What is Project Agora from BIS?
Bank for international settlements has been working with many banks in US, UK and european nations. And they are the one giving consultation to the Bank of Europe and many others regarding the CBDC and the blockchain world. And they would be one who are going to set the plans for the regulations. Now they are working on models towards the cross border payments.
Project agora was designed to handle the cross border asset tokens and the tokenization across the connecting banks and the govt treasury. This would be like being entity to manage the smart contracts and the asset tokens. This would also reduce the international payments and the tokens in general. In grand scheme of monetary asset system this would be a good leap of change. You can check out the document here.
Project Agora's Unified Ledger
Turning a money asset and then converting into token would take a lot of understanding of what is the asset and how it can be used in the govt context. So the banks and the govt has to come up with the ledger and the associative assets that would keep an eye on the movement of the transactions. And how the transactions be logged? Through the ledger this is how things are going to get setup and it would be acted upon as well.
There is a huge documentation coverage of the BIS's agora document that is intended for the ledger. And the concept in theory is also covered in the document. So the unified ledger would make things easier for the banks and the govt treasury to map the moving funds and the assets which are coming under such type of the system where the ledger's value matters a lot. You can check out the document here.
Global Digital Asset Interoperability through Agora
As the name implies the project intends to become the marketplace of the digital market assets. And this would be a good direction that would be making the banks around the world to participate in the common ledger that would be building the system in such way that would save on fees and also the asset movement as well. Which may take some years for all banks to reach on consensus.
There is a huge chance that this project would extend out of the EU and would be covering more banks. And in turn this would be a big market after the bitcoin etf to be extending towards the asset sharing and the asset management in upcoming future. I would say that this can be agood change that we are going to be witnessing in upcoming future.
Bank for intentional settlement is going to unite the banks and the digital assets using the Project Agora. Let's see what they can do in upcoming times when the digital assets get international.