The central banks - Bank of France (representing the Eurosystem), Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank, Bank of England and the Federal Reserve Bank of New York - plan to work on the project, dubbed Agorá (Greek for 'marketplace'), in partnership with a large group of private financial firms convened by the Institute of International Finance (IIF).

The project builds on the unified ledger concept proposed by the BIS and will investigate how tokenised commercial bank deposits can be integrated with tokenised wholesale central bank money in a public-private programmable core financial platform.

The initiative will use smart contracts to enable new ways of settlement and unlock types of transactions that are not viable or practical today.

The BIS sayas the aim of the project is to overcome several structural inefficiencies in how payments happen today, especially across borders, combatting different legal, regulatory and technical requirements, operating hours and time zones.

The initiative will also tackle the increased complexity of carrying out financial integrity controls against money laundering and customer verification, which are often repeated several times for the same transaction, depending on the number of intermediaries involved.

If successful, the project has the potential to displace banking co-operative Swift, by linking together central banks for cross-border payments with zero settlement risk.

Cecilia Skingsley, head of the BIS Innovation Hub, says Agorá is the most ambitious project yet to be undertaken by central banks, commenting: "We beleive that tokenisation is the next frontier in terms of the digitalisation of money and payment."

The BIS intends to issue a call for expressions of interest from private sector financial institutions representing each of the seven currencies to participate in the project.