Plagued by high costs, low speed, limited access and insufficient transparency, cross-border payments have recently been pushed up the political agenda as a key focus of the G20.

With BIS playing a key role in the G20 programme, it has now brought in the Bank of Israel, Central Bank of Norway, Sveriges Riksbank and its own Innovation Hub Nordic Centre for Project Icebreaker.

Project Icebreaker will run until the end of the year, developing a "hub" to which participating central banks will connect their domestic proof-of-concept CBDC systems. The objective is to test some specific key functions and the technological feasibility of interlinking different domestic CBDC systems.

The architecture is designed to enable immediate retail CBDC payments across borders, at a significantly lower cost than with existing systems, which are typically based on the correspondent banking system.

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