(Bloomberg) -- The Bank for International Settlements and seven central banks including the Federal Reserve Bank of New York will test using tokenization to increase the speed and integrity of international payments.

Partnering with a large group of private financial companies, they will explore combining wholesale versions of tokenized central bank money and commercial bank deposits on a unified, programmable platform. 

Using tokenization, which involves recording assets on a blockchain, has the advantage of combining messaging and settlement aspects of a payment in one transaction, said Hyun Song Shin, an advisor and researcher at the BIS Innovation Hub. 

The aim of so-called Project Agora is to overcome difficulties in cross-border payments due to different legal, regulatory and technical requirements, operating hours and time zones, according to the BIS. 

“In our upcoming digital market place, the public and private sector will meet with the ambition of developing a new paradigm for improving cross-border payments,” said BIS Innovation Hub head Cecilia Skingsley. 

In addition to the New York Fed, the Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank, Bank of England and Bank of France are participating, with the latter representing the network of euro-area central banks. 

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