The central banks of Israel, Norway and Sweden have teamed up with the Bank for International Settlements (BIS) to explore how central bank digital currencies (CBDCs) can be used for international retail and remittance payments, BIS announced on Wednesday.

The BIS is an association of 61 central banks from around the world and has innovation hubs set up in multiple locations focused on exploring the applications of new financial technologies including CBDCs, which are digital versions of countries’ sovereign currencies.

The new collaboration, called Project Icebreaker, involves the BIS Innovation Hub’s Nordic Centre, and it will test key functions and technical aspects of interlinking different domestic CBDC systems, according to a press statement.

Cross-border payments continue to be plagued by high costs, low speed, limited access and insufficient transparency, BIS said in a press statement. The International Monetary Fund has said CBDCs could cut costs for international payments while earlier this week, the BIS Innovation Hub announced the success of a project involving multiple Asian CBDCs that facilitated over $22 million in foreign-exchange transactions.

Project Icebreaker will test near-instant retail CBDC payments across borders at lower costs. A final report on the project is expected in the first quarter of 2023.

“This first-of-a-kind experiment will dig deeper into the technology, architecture and design choices and trade-offs, and explore related policy questions,” said Beju Shah, Head of the BIS Innovation Hub Nordic Centre. “These learnings will be invaluable for central banks thinking about implementing CBDCs for cross-border payments.”